Insider trading can be prosecuted by the Justice Department, and it can be pursued in a civil enforcement action by the Securities and Exchange Commission. The S.E.C. used to handle the bulk of these cases, but lately it seems that more cases result in criminal charges along with a parallel lawsuit.
An interesting question is why there has been a push to turn cases that once might have resulted only in civil charges into criminal prosecutions, which carry a much more significant social stigma along with the threat of prison time. What makes a particular instance of insider trading so wrongful that the government’s most powerful law enforcement weapon — a criminal conviction — is used on defendants who pose little threat to society beyond their own avarice?
‘Enforcement 40’ for 2020
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