Further investigations are being launched

Alan Kaufman, associate at the law firm of Kelley Drye in New York, ensures the defence of Danielle Chiesi, hedge fund New Castle, which is charged for insider trading in the Galleon case. Previously, he was head of the criminal division of the Federal Attorney for the southern district.

The Galleon case began a year ago. Further investigations are being launched. Is it a toughening of the federal authorities

The Government is trying to make Galleon something major. It is the first time he pursued a speculative Fund for insider trading and is the first time he used to telephone tapping to achieve its ends. Preet Bharara, the Federal Prosecutor in New York, publicly stated that the Insider is a problem which has been too little taken into account lately and its teams granted him more attention. The Securities and Exchange Commission (SEC), the insider was at the origin of financial dislocation and must undergo more pressure to tackle the Ponzi schemes or complex instruments that are the "collateral debt obligations" or the "rate securities auctions.

The noose is tightening yet on hedge funds...

The Government has launched a much larger than usual NET. If it tries to extend the concept of the insider, it is likely that we are at the beginning of something that can be expanded. This is important and that you will have to follow: what is the concept of insider changes Each must be able to know where is the dividing line. The fear is that if its definition expands, the Government pursuing individuals for facts where obligations were not included in the same way that the State can do today.

One of the difficulties is that the Insider is not defined by law in the United States...

This is true, there is a law on the securities fraud but not on insider itself. It has been defined by the courts and seeks any information which is not public and which was unveiled by someone who is not supposed to do. The person who received the information inherits the obligation of confidentiality that should animate the person who has the given. Another theory is that of undue appropriation of information, such as, for example, a lawyer specialized in mergers & acquisitions that will break the privacy report linking his firm to the client company.

Ongoing investigations pointed the finger at networks of experts. What is it

It is the first time that investigations for insider trading directly concern them and that is a new axis of investigation authorities. The first occurrence was with the French physician, Yves Benhamou, who worked for the hedge fund FrontPoint. These expert networks companies sell services to the Fund to help improve their investment strategy. A priori, there is nothing objectionable.

What are the usual convictions for insider in the United States

In criminal cases, this can result in decades in prison. In the case I, case Galleon, there were currently three sentences of 6, 18 and 27 months. In the case of the civil actions by the SEC, the sanctions are fiduciary.