Thursday, December 3, 2009

SEC Stepping Up Insider Trading War with New Subpoenas

As reported by the Wall Street Journal today, the SEC is making noise about efforts to step up enforcement and clamp down on insider trading. These efforts have started with at least three dozen subpoenas sent to brokerages and hedge funds.

Attention on this issue is definitely swelling. And this attention is not limited to pure financial institutions. (Readers should recall the law firm insider trading scandal that ended tragically this past October.) The article calls out the SEC's focus on understanding how confidential and market sensitive information moves (appropriately or inappropriately) among all parties, including law firms:
  • "[The SEC] says it is now trying to better understand the flows of information on Wall Street — where traders, bankers, lawyers and others behind-the-scenes players swap information and favors. The SEC is using computer technology to examine these webs of relationships, especially when individuals or firms surface in multiple surveillance referrals."

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