The Worldwide Clamp Down on Insider Trading

Posted by Ian Cooper - Monday, November 29th, 2010

From CNBC:

"When US investigators were hot on the trail of Don Ching Trang Chu, a former consultant who made a living linking hedge fund traders with corporate insiders, they say they captured him on tape explaining that he preferred to do most of his work in Asia.

Most of the “real time” information Mr Chu’s contacts provided was about publicly-traded US companies, but many of the calls and meetings allegedly took place abroad.

“I don’t want to (be) involved in the States . . . It’s dangerous. SEC (the US Securities and Exchange Commission) is too strong. In Asia, the SEC can’t do too much there . . . In Asia, there, nobody cares,” Mr Chu allegedly said, according to a criminal complaint filed against him last week. No trial date has been set.

The perception that the US takes insider trading more seriously is widely shared by traders and regulators. Although most countries have officially banned trading on non-public information for a decade or more, enforcement has been patchy or non-existent.

That is starting to change in two critical ways: some Asian and European regulators are taking a much tougher stance against insider trading in their own markets and they are co-operating with the SEC and US prosecutors to deal with cross-border violations.

Both the UK and Hong Kong have sharply stepped up..."

Read more here.

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