Against the backdrop of increased SEC enforcement related to insider trading, Richard M. Strassberg, chair of Goodwin Procter’s White Collar Crime & Government Investigations Practice, was interviewed on SmartPros’ Financial Management Network for a segment on “SEC Enforcement: How Their Agenda Affects You.”
Strassberg described the recent uptick in insider trading prosecutions as a byproduct of the tough economy, an aggressive SEC and the public’s desire for justice for what it perceives as Wall Street misdeeds. Strassberg also detailed how the agency has become more sophisticated in prosecuting these cases, citing the use of wiretaps and cooperation agreements as examples.
In this environment, he said, aggressive SEC action may lead to overreach, and charges alleging insider trading, even if eventually proven false, can lead to costly, time-consuming trials and negative publicity. Strassberg stressed the importance of implementing effective compliance and training programs to deter insider trading charges against company employees: “It’s very important for the leaders at the companies to set the tone from the top so that employees know that these issues are taken seriously.”
Strassberg expects the uptick in SEC enforcement activity to continue and predicts more insider trading prosecution in 2011 due to increased SEC funding following the fiscal crisis. He also identified the Foreign Corrupt Practices Act as an area that will become a priority for the Commission in the years to come.
The wide-ranging discussion covered a number of additional topics related to insider trading, including SEC regulation of non-U.S. securities markets, the difference between legal and illegal insider trading, and Strassberg’s work on behalf Jon-Paul Rorech, who was found not guilty in the first ever derivatives insider trading case. The complete interview can be found here.