It may seem strange that Wall Street’s top cop has chosen to attack Galleon and SAC instead of the institutions at the heart of the mortgage meltdown that brought on the financial crisis. It may seem even stranger when you consider that a lot of legal scholars don’t think insider trading is fraud, and a few even think it should be encouraged.
It is strange. That said, it’s pretty clear why it happens: Bharara and his predecessors (Rudy Giuliani held the same job in the late 1980s) have taken on insider trading cases because they can win them. Thanks to a half century of SEC opinions and court rulings, insider trading is much easier to prosecute than other dodgy financial behavior. The question, really, is whether this amounts to a perverse miscarriage of justice, or just a somewhat convoluted way of enforcing norms for good behavior on Wall Street.
‘Enforcement 40’ for 2020
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