On June 5, 2026, the Securities and Exchange Commission charged JianQing Li, a former investment analyst at a New York-based investment adviser, with allegedly insider trading in the securities of at least twelve healthcare companies from February 2024 through October 2025. According to the SEC’s complaint, Li had access, through his employment at a registered investment adviser focused on the…
Federal regulators are investigating disgraced former Congressman George Santos for possible insider trading on the prediction market Kalshi, sources familiar with the matter told ABC News. Kalshi flagged a series of wagers Santos made in February tied to his attendance at President Donald Trump’s State of the Union speech, the sources said. Kalshi referred the suspicious trades to its regulator,…
Sentencing disparities prevail in the insider trading criminal context. On average, corporate directors and officers convicted of insider trading are treated significantly more leniently than rank-and-file employees as well as other offenders convicted of the same offense. These disparities exist even though high-level executives monetarily profit significantly more, on average, than their lower-level insider counterparts. This phenomenon directly contravenes the federal Sentencing Guidelines. Faithful implementation of these guidelines would result in substantially more severe sentences for such high-level offenders.[…]
Our article is the first to examine recent sentencing disparities unique to insider-trading cases. It ascertains the depth and breadth of the disparities by reviewing the legally salient facts and circumstances of dozens of high-profile and undeservedly low-profile insider-trading cases and questions the propriety of the resulting prison sentences. Additionally, we aggregate sentencing data from nearly 100 recent criminal cases from the previous five years to assess patterns and inequities across insider trading sentences.
Our analysis shows that the application of the Sentencing Guidelines, when combined with routine departure from these guidelines by federal judges, has culminated in an inequitable sentencing regime. To ameliorate this situation, we reason that fiduciary breach should be a priority because it is a significantly more accurate measure of culpability than the financial amount illegally gained or avoided by the offender.
Source: Inequitable Sentencing Disparities in Insider Trading | CLS Blue Sky Blog
The sprinkle of prediction market policy updates among the S&P 500 fall within insider trading policies or codes of conduct. The former usually pertains to regulated securities, while the latter often broadly directs employees not to use confidential information for personal gain.
“You can find provisions in a lot of policies that you could kind of squint and read to cover prediction markets,” said Matthew Gehl, partner at Covington & Burling LLP.
But being more explicit isn’t a bad idea, he said.
Internet domain registry GoDaddy clarified in an April 24 proxy statement that its insider trading policy covers prediction markets.
“Given the increased popularity and visibility of these platforms and the fact that participation is not governed by existing insider trading laws, we felt it was prudent to establish this policy for the company and its employees,” a GoDaddy spokesperson said over email.
Data storage company Seagate Technology Holdings named Polymarket and Kalshi in a May 1 code of conduct update banning employees from “speculative activities where Seagate is the subject.” And construction and engineering firm Emcor Group Inc. amended its insider trading policy April 2 to ban prediction market trades involving nonpublic information.
These companies are the exception. Kimpel predicts most will need a catalyst to act.
“Unless there’s some serious enforcement case, you may not see a lot of change,” he said.
Source: Prediction Markets Pose Insider Trading, Company Reputation Risk
For decades, the information that fueled insider trading was found on Wall Street or inside the glass offices of public companies across the country.
The rise of prediction markets has created a new temptation in Washington, where the Trump administration’s fast-moving agenda is giving those privy to government information a chance to cash in on the volatility.
Regulators and prosecutors are now playing catch-up to combat a batch of suspicious betting that touches various corners of the federal bureaucracy. It is a new challenge for authorities because insider-trading laws weren’t designed for people who bet on the outcome of legislation, political races and even U.S. military operations.
Source: Suspicious Betting in Washington Is on the Rise—and Authorities Are Playing Catch-Up – WSJ
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
Despite his Ivy League pedigree, Nourafchan was a midlevel deal lawyer who hopped among prestigious firms. He got his start at Sidley Austin and spent a few years at Latham & Watkins before he was let go in 2021. Goodwin terminated him in August 2023 after he hadn’t worked on a billable matter for months.
His main reason for showing up at the office, according to court records and people familiar with the matter, was to sift through computer systems to uncover pending deals that he could sell to an ever-growing ring of traders in Florida, New York, Russia and Israel. He even tried to get hired at a public-relations firm that worked on mergers after he left his last law-firm role, hoping to scoop up more tips there, prosecutors said.
Source: The Insider-Trading Scandal That Is Rocking M&A Law Firms – WSJ
The typical story of M&A lawyer insider trading is that the lawyer tells his buddy about an upcoming merger, the buddy trades on it, the buddy makes a nice profit, and the lawyer gets either nothing or a small thank-you gift (of cash) from the buddy. My firm was traumatized by a former partner who went to prison for an insider-trading scheme in which he made no money. It seemed to me, and to the partners teaching the training session, and to everyone else I have ever talked to about this, that it would be insane to throw away a respectable and lucrative career and go to prison to make, like, $20,000.
Is the explanation “you think you are smarter than everyone else and will get away with it”? Is the explanation “your buddy is really insistent and you can’t bear to let him down, so you give him some merger tips”? Is it “people who become M&A lawyers are adrenaline junkies and love danger”? (No.) Is it “people sometimes give themselves painful electric shocks just because that is an option that’s available to them”?
Source: Insider trading
US charges that three M&A lawyers exploited client secrets for financial gain raise questions as to how they got hired at seven different Big Law firms over the course of their alleged crime spree.
One of the three, Nicolo Nourafchan, worked at Sidley Austin, Latham & Watkins and Goodwin Procter between 2013 and 2023, federal indictments allege. After four years at Sidley, Latham brought him on and fired him after about two years. Goodwin next gave him a job before dismissing him in a couple years.
He allegedly committed crimes at all three firms. Neither the indictments nor statements from Latham and Goodwin indicate the firms had knowledge of the alleged criminal activity. Latham and Goodwin didn’t immediately respond to requests for comment about why they fired Nourafchan.
“There’s kind of a presumption that you’re working with honest folks in the vetting process because of the other higher powers outside of an employer who have stronger investigatory tools and more incentives to catch this stuff,” said Mathew Brown, a Washington DC-based legal recruiter. “A little skepticism about asking folks hard questions might be warranted going forward.”
The allegations highlight how several large law firms can be dragged into wide-reaching white collar criminal investigations by a few bad actors. Big Law attorneys frequently change firms in today’s hiring market, and if they’ve been involved in illegal activity, recruiters say, it’s not always easy to filter them out.
Source: Big Law’s Alleged M&A Insider Traders Switched Firms With Ease
Federal prosecutors’ indictment of 30 white-shoe lawyers and their associates, alleging more than a decade of insider trading on corporate mergers, is both juicy and quaint.
Savor it. The next big insider-trading case will look nothing like this one. […]
The next version will be tougher to catch and harder to prosecute. Disappearing encrypted messages and prediction-market bets tied to crypto wallets will replace options trading in Caribbean brokerage accounts. Well-timed trades by members of Congress or family members of administration officials will make it harder to get excited about a bumbling netherworld of law-school roommates.
The legal arguments will get fuzzier, too: The alleged mastermind of this ring, a lawyer who worked at big law firms including Latham & Watkins and Sidley Austin, obviously had a duty to keep his clients’ M&A plans a secret. Jeff Bezos’ stepson does not. When you sign a confidentiality letter and then your brother’s hairstylist buys call options on the target company, the indictment writes itself. But when the arena expands from stocks to anything-you-can-wager-on, the definition of inside information gets slippery, enforcement becomes legal whack-a-mole, and the edge goes to whoever moves fastest into the regulatory gaps.
Source: The next big insider-trading case won’t look anything like this | Semafor