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FBI says conducting 30 undisclosed insider trading probes


07/06/2016


FBI says conducting 30 undisclosed insider trading probes
In a sign investigators remains focused on building cases despite a court ruling that could curtail such prosecutions, the FBI in New York City has undisclosed probes into about 30 suspected insider trading schemes, the agency said.
 
In recent times there has been a resurgence of insider trading cases, with prosecutors in Manhattan charging 11 people so far in 2016, up from just four in 2015 and the number of probes, which has not been previously reported, comes amid such an environment.
 
A spokeswoman for the agency said last week that including about 30 cases which have yet to result in publicly-filed charges, the Federal Bureau of Investigation's New York office has about 50 ongoing insider trading investigations.
 
Authorities have said that a 2014 ruling by the 2nd U.S. Circuit Court of Appeals could allow some individuals to avoid prosecution and it has already led to charges being dropped or reversed for 14 defendants. The FBI probe follows that verdict and popular government sentiment.
 
The ruling could prevent some people from being charged in certain circumstances, acknowledged John Casale, assistant special agent in charge of the FBI's complex financial crimes unit in New York.
The ruling, which reversed the convictions of hedge fund managers Todd Newman and Anthony Chiasson, have not had to close any non-public investigations as a result of it, he said.
 
Like a quid pro quo involving money, prosecutors must establish that a trader knew the tipper received something in exchange for the tip, the court ruling had said while fixing the modalities to prove insider trading, and that the benefit was of "some consequence."
 
The proposition that merely a friendship could constitute a benefit to the tipper was rejected by the court. Agents are increasingly focused on showing the tipper received a monetary or other tangible benefit, Casale said.  
 
"There's never been a slowdown in our process of thinking about cases. This was a hurdle we had to overcome," Casale said in an interview last week.
 
The question of whether the FBI and prosecutors will be able to ultimately bring charges in those 30 undisclosed investigations is however still unclear. Such probes can often be closed without charges being brought.
 
While not providing information on how advanced the cases were, the FBI also did not comment on the details of the undisclosed probes. Casale said some involved multiple individuals.
 
Meanwhile there is still confusion over the law of insider trading. An appellate ruling out of California could not be used to clarify the definition of insider trading by the U.S. Supreme Court when in January it agreed to review the ruling.
 
The Manhattan U.S. Attorney Preet Bharara, whose office has since 2009 announced charges against 107 people, and secured convictions of 81 individuals, are among the insider trading cases that the FBI has been pursuing.
 
Hedge fund manager Sanjay Valvani, who worked at Visium Asset Management LP and committed suicide last month following his indictment and famed Las Vegas sports gambler William "Billy" Walters, who has pleaded not guilty could include those charged this year.
 
(Source:www.reuters.com) 


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