Government Enforcement Attorneys Analyze Amendments to Insider Trading Sentencing Guidelines and Appropriate Compliance

May 8, 2012
1 minutes
Government enforcement partners Chris Conniff (New York) and Jim Dowden (Boston) have written “Insider Trading Sentences Get Extra Bite” for the May 7 issue of Compliance Reporter. The article examines the U.S. Sentencing Commission’s amendments to increase the recommended sentences for defendants convicted of federal insider trading crimes and outlines an appropriate compliance response. The amended guidelines were developed in response to a Dodd-Frank Act directive and reflect a heightened interest in crimes committed by hedge fund employees and investment managers.

The authors write, “So while past practice suggests that judges have not found the existing insider trading guidelines insufficient, the proposed amendments will necessarily have a substantial impact in the field. First, although strict adherence to the sentencing guidelines is not mandatory, federal district judges are required to at least calculate and consider the guidelines sentencing range before imposing a sentence. Judges have to explain the reasonableness of any downward departure, and the further below the guidelines range, the better the explanation must be to survive appeal. As the ranges go up, it stands to reason that so too will the minimum below-guidelines sentence a judge would be willing to render. Second, regardless of culpability, a financial professional accused of insider trading will face increased exposure, ratcheting up the government’s leverage and possibly altering the plea calculus.”

To view the full article, please click here.