Pay Your Way Out Of Insider Trading Accusations
SAC had proposed a $14 million settlement with SEC last month for an insider trading case and the court had recently approved of this settlement. The ruling of this case has made another judge; Victor Marrero who is currently ruling on a $602 million settlement rethink the terms of settlement. Marrero believes that the government should not allow companies to just pay their way out of such cases without having to admit to doing something wrong. The rulings on these cases may largely affect the most recent accusation of SAC’s senior employee Michael Steinberg for yet another case of insider trading.
Judge Victor Marrero brings up a good point about settlement fees. Inside traders can easily make a large amount of money exceeding the amount that they must pay for a settlement, so just relying on settlement fees may not be the best way to end insider trading practices. Having to pay a settlement fee but still earning a lot of money for insider trading does not give employees less of an incentive to do so. If the government really wants to prevent insider trading heavy consequences should be executed.
Written by: Jessica Ho
Source: The Wall Street Journal
Bray, Chad. (2013). Judge Approves $14 Million Settlement by SAC in SEC Insider-Trading Case. The Wall Street Journal. Retrieved From:http://online.wsj.com/article/SB10001424127887323611604578396950285187338.html?mod=WSJ_business_whatsNews