The scale and sophistication of the latest bust may change firms’ internal policies.
“Given the length of the conspiracy, the number of defendants and the fact that the scheme was carried out, according to the indictment, at six of the largest law firms and by a graduate of Yale Law School, it is clear the policies and procedures around preventing insider trading at law firms have to be reexamined, especially at firms with a large M&A practice,” said Boies Schiller Flexner partner Douglas Miller, a former supervisory trial counsel at the SEC’s Los Angeles regional office. […]
At what point would a law firm cross the line from “victim” status to being held responsible by prosecutors if one of its lawyers stole nonpublic data? Joo suggests “the firm would have to be even more than extremely negligent. Something more like willful ignorance.”
Source: ‘Shot Across the Bow’: Insider Trading Scheme May Prompt Changes in Big Law | Law.com
