Section Two: Fraud in the Financial Marketplace -- Recent Legislative and Other Developments in Criminal and Civil Securities Enforcement (From Readings in White-Collar Crime, P 69-82, 1991, John Lichtenberger, ed. -- See NCJ-129577)

• NCJ Number: 129581
• Author(s): C M Carberry; G T Manning
• Date Published: 1991
• Length: 14 pages
• Sale Source: Meckler Publishing
• Publication Type: Legislation/Policy Description
• Language: English
• Country: United States of America

Annotation

Aggressive enforcement of securities laws in recent years has included the passage of legislation and new Securities and Exchange Commission (SEC) proposals.

Abstract

Congress increased criminal penalties for securities violations in the Insider Trading and Securities Fraud Enforcement Act of 1988 and made controlling persons expressly liable for the insider trading of their employees. Substantial changes were also made in 1988 to the Foreign Corrupt Practices Act. An increasing number of criminal charges were brought for violations of securities laws. Two novel Racketeer Influenced and Corrupt Organizations (RICO) Act developments were the first lodging of a RICO charge against an individual insider trading defendant and the first use of RICO pretrial restraining orders against an unindicted brokerage house. Recent criminal prosecutions against high-ranking officials of public companies for fraudulent financial reporting followed the Treadway Commission's recommendations for increased criminal prosecutions in this area. On the international front, the SEC has the power to collect information on behalf of foreign authorities. The SEC has also gone back to Congress to obtain exemptions from the Freedom of Information Act for material provided to the SEC by foreign regulators. Provisions of the Insider Trading Act and Securities Fraud Enforcement Act and the Foreign Corrupt Practices Act are detailed. Case law prosecutions involving insider trading are noted, and criminal prosecution for securities offenses is discussed. 13 notes