I observe that there appears to be a common misconception among individuals charged with insider trading that their various efforts to hide their misconduct and their trading through faceless markets will somehow prevent detection. Unfortunately for them, nothing could be further from the truth. The SEC and the SROs dedicate substantial resources toward market surveillance, and inevitably they will detect trading anomalies and connections that allow them to investigate potential insider trading cases. With constant advances in data science and computing, these market surveillance efforts just get bigger and better, making the chances of conducting an undetected insider trading ring much smaller. Perhaps this is a point that we should all emphasize more in our insider trading training sessions, because I would hope that if people realized just how sophisticated the surveillance effort is, they might think twice about misappropriating the company’s material nonpublic information and trading or tipping.
Source: Insider Trading – Why Do They Do It? : TheCorporateCounsel.net Blog
