Hedge Fund Trader Is Sentenced to 4 1/2 Years in Insider Case

Another hedge fund trader was recently sentenced for insider trading. Todd Newman the latest member to who got caught for insider trading traded at Diamondback Capital Management earned more than $10 million in just five years of work. The insider case focused mainly on Todd Newman’s insider trading on NVIDIA and Dell. Trading on insider information, Todd Newman with six others earned an estimated $70 million. It seems like no matter how many hedge fund traders get caught with insider trading, people just don’t learn. Trading on insider information is not only unfair but also comes with severe consequences. As Todd Newman stood before the judge, he was sentenced with four and a half years of prison term.

In my opinion, trading on insider information is not a good tactic for making money. Most hedge fund managers trade on insider information because it is easy money but they don’t realize that if they get caught, all of it would have been in vain. Most of the cases involving insider trading results in pleading guilty because there is no defense against it. Not only is insider trading illegal, it has a detrimental effect on the economy. It can shut down businesses and costs families their fortune.

Written by: Wilson Tang

Source:

http://dealbook.nytimes.com/2013/05/02/hedge-fund-trader-sentenced-to-4-12-years-in-insider-case/?ref=business

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