SEC to investigate Street insider trading
Senior official says SEC has formed a working group to look into “rampant” insider trading among Street pros.
Insider trading appeared to be “rampant” among Wall Street professionals, and the regulator has formed a working group to focus on it, said a senior official at the Securities and Exchange Commission.
“I believe we’re going to see more insider trading cases,” Linda Chatman Thomsen, the SEC’s enforcement director, told reporters on the sidelines of a securities fraud conference, according to a Reuters report.
“I am disappointed in the number of cases we are seeing by people who make an abundant livelihood in the market that they are sort of abusing by insider trading,” said Ms. Thomsen.
Insider trading “appears to be rampant” among Wall Street securities professionals, she said.
SEC enforcement lawyers have brought increasing numbers of insider trading lawsuits within the past year.
Some of the cases include charges against a husband and wife in Hong Kong for trades in New York-based Dow Jones & Co. Inc. shares ahead of News Corp.’s $5 billion takeover bid.
In another case, three former executives at Countrywide Financial Corp. in Calabasas, Calif., pleaded guilty to trading company shares ahead of a disappointing profit report.
Ms. Thomsen expects more enforcement actions related to options backdating, but would not provide a time frame.
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