US regulators, exchanges move to squeeze insider trading
Friday, 15 August 2008
WASHINGTON, Aug 14 (AFP): US regulators and ten stock exchanges, including the New York Stock Exchange (NYSE), have forged a new alliance to clamp down on illegal insider trading, the Securities and Exchange Commission announced Wednesday.
The SEC said the non-government Financial Industry Regulatory Authority (FINRA) and the ten stock exchanges have agreed a common policing plan, which would centralise the dectection and prosecution of insider trading across US markets.
"This should send a strong warning to those who would undermine market integrity and undercut investor confidence for their own personal gain," said SEC chairman Christopher Cox.
The plan has to be formally approved by the SEC. Its blueprint calls for surveillance, investigation and enforcement actions to be centralised under FINRA and the regulatory branch of the NYSE instead of relying on each exchange to monitor against insider trading.
The SEC keeps a close guard on trading-it filed civil charges against a former partner of the Ernst & Young accounting firm in May in relation to an insider trading probe-but it's unclear just how rife insider trading is in US markets.
Securities lawyers say insider trading cases can sometimes be extremely difficult to prosecute and prove. One insider trading ring that was shut down by the government had used disposable cell phones and special codes to swap inside stock tips.
SEC and specially-trained NYSE investigators have boosted their policing against insider trading in recent years, partly through new high-tech computer networks that monitor suspicious trades.
The regulator said it hoped that the plan announced Wednesday would better protect investors.
It is supported by the American Stock Exchange, the Boston Stock Exchange, the CBOE Stock Exchange, the Chicago Stock Exchange, the International Securities Exchange, NASDAQ, the National Stock Exchange, the NYSE, NYSE Arca and the Philadelphia Stock Exchange.
Interested parties have 21 days to submit public comments before the SEC votes on whether to endorse the proposed plan.
The SEC said the non-government Financial Industry Regulatory Authority (FINRA) and the ten stock exchanges have agreed a common policing plan, which would centralise the dectection and prosecution of insider trading across US markets.
"This should send a strong warning to those who would undermine market integrity and undercut investor confidence for their own personal gain," said SEC chairman Christopher Cox.
The plan has to be formally approved by the SEC. Its blueprint calls for surveillance, investigation and enforcement actions to be centralised under FINRA and the regulatory branch of the NYSE instead of relying on each exchange to monitor against insider trading.
The SEC keeps a close guard on trading-it filed civil charges against a former partner of the Ernst & Young accounting firm in May in relation to an insider trading probe-but it's unclear just how rife insider trading is in US markets.
Securities lawyers say insider trading cases can sometimes be extremely difficult to prosecute and prove. One insider trading ring that was shut down by the government had used disposable cell phones and special codes to swap inside stock tips.
SEC and specially-trained NYSE investigators have boosted their policing against insider trading in recent years, partly through new high-tech computer networks that monitor suspicious trades.
The regulator said it hoped that the plan announced Wednesday would better protect investors.
It is supported by the American Stock Exchange, the Boston Stock Exchange, the CBOE Stock Exchange, the Chicago Stock Exchange, the International Securities Exchange, NASDAQ, the National Stock Exchange, the NYSE, NYSE Arca and the Philadelphia Stock Exchange.
Interested parties have 21 days to submit public comments before the SEC votes on whether to endorse the proposed plan.