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Insider Trading Essay

1476 words - 6 pages

Insider Trading at the Galleon Group
The Galleon Group was one of the largest hedge fund management firms in the world, managing over $7 billion, before closing in October 2009.
From greed to more greedy, and finally to destruction, this time the protagonist is Rajaratnam, he was accused of 14 securities fraud. Rajaratnam had a glorious history. He is 52 years old Sri Lanka-American, graduated from the Wharton School, he began his career in the field focusing on technology investment bank Needham & Co., An analyst from the start, 34-year-old became the president of this bank. In 1997, he started a technology stocks investment company, which was called Galleon Group in New York. In ...view middle of the document...

Illegal insider trading therefore includes tipping others when you have any sort of nonpublic information. Directors are not the only ones who have the potential to be convicted of insider trading. People such as brokers and even family members can be guilty.
Insider trading is legal once the material information has been made public, at which time the insider has no direct advantage over other investors. The SEC, however, still requires all insiders to report all their transactions. So, as insiders have an insight into the workings of their company, it may be wise for an investor to look at these reports to see how insiders are legally trading their stock.
3.4 Wiretaps Discussion
In Galleon insider trading case, US law enforcement was authorized by the court for the first time, use of wiretap in securities fraud cases to monitor insider-trading activities. Wiretapping technology has always been a sensitive topic, questioning its disclosure of personal privacy has always been interrupted before. The United States in 1968 made detailed provisions for wiretapping by the conditions, procedures, protection rights of way and the defendant the "Comprehensive Crime Control and Safe Streets Act" in order to balance the conflict between privacy and effective law enforcement, which is US existing norms valid legal documents wiretapping technology. The law applicable to the establishment of secret listening strict conditions, generally only applies to major complex organized crime, such as murder, kidnapping, robbery, drug trafficking and other crimes.
In order to protect commercial freedom and fundamental human rights, Wiretapping technique has never been used in economic cases. As the financial scale of today's securities crime increased, higher degree of organization, the harm has become more prominent, so this conservative approach seems to have been left behind, unable to cope with an increasingly complex and suppression and serious financial crimes. Because the United States case law prohibited content cannot explicitly necessary enactments supplement, therefore, according to the principles of the history of several famous cases identified (such as 1967 cases of Katsv.US and Bergerv. New York etc.), law enforcement agencies can be based on the Court the license to conduct Wiretapping case, so FBI is able to do for the first time to use the technology in insider trading case.
Of course, Wiretapping technology application still have to follow a strict restrictive conditions, such must be in order to use when conventional investigative techniques impossible or very difficult to ascertain the facts of the case; another example must undergo the statutory authority approved rigorous approval to for use; and must follow strict procedures to perform, such as listening time, scope, save the information received, the use and destruction and so must be strictly according to law, otherwise the abuse of Wiretapping technology will allow people to lose a...

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