Insider Trading Cases of The Century


+9687Normal blue collared folk have become overnight millionaires due to trading. But unfortunately, wherever there’s honest money to be made through legal Insider Trading. There will always be people looking to make a quick buck or million by working the system even if it’s illegal. 

Insider trading is a big problem. Here are two of just some of the biggest insider trader scandals. 

In 2012 Steve Cohen reaped $276 million in profits and losses avoided from Insider information.  

The scam included: 

Steve Cohens firm SAC Capital Advisors worked closely with Mathew Martoma, a Portfolio Manager at SAC Capital, who had an inside source that worked on a clinical trial Alzheimer’s drug. The hedge funds bought shares from the drug companies involved in the trial and bet that the company’s shares would fall  

The pay up:  

SAC’s and its lawyers agreed to pay a record $616 million in penalties to the SEC to resolve two civil insider trading lawsuits. Investigators are revisiting the case and pursuing charges on Steve and SAC  

In 2010 Raj Rajaratnam was involved in an Insider Trading scandal that was called Wall Street’s largest scandal in decades. 

Money made:  

Rajaratnam and 19 others earned $60 million in profits. 

The Scam:  

As a billionaire hedge fund manager and founder of the Galleon Group, Rajaratnam swapped insider tips with a number of other traders, hedge fund managers and key employees at IBM, Intel Corp & Mckinsey & Co.  

The Pay up:  

Rajaratnam was found guilty of 14 counts of conspiracy and fraud and he was also fined $92.8 illion (the largest fine a SEC has imposed on an individual). Courts also ordered Rajaratnam to forfeit more than $53.8 million and he was also sentenced to 11 years in federal prison, (the second longest sentence ever for Insider Trading). 



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