A jury in a San Francisco federal appeals court determined that an individual businessman will spend 3 years in a federal facility for his part in an insider trading scheme involving Citigroup. Charges included conspiracy and 4 counts of securities fraud. The Orland Park, Illinois man received tips concerning mergers and acquisitions occurring through Citigroup and was originally convicted of securities fraud in 2013. He then shared that information with several family members, who have also been sentenced, though to lighter terms, probation, or house arrest.
“18, U.S. Code 1348 prohibits securities and commodities fraud. This crime involves defrauding any person or company in connection with insider information. Clearly, this information must be gained fraudulently in order to be considered illegal. A ‘security’ could refer to many different things. In the main, this term most often signifies investment contract, municipal bonds, bank notes, or corporate stocks. Securities fraud is considered to occur when someone uses what should be private information in order to promote financial gain. The Securities and Exchange Commission is the federal arm responsible for prosecuting frauds of this kind.”
The fines involved in securities fraud can be quite cumbersome, though the amount authorized by a particular court will likely be determined by the circumstances of each individual case, these can range anywhere from $10,000 to millions of dollars. Prison sentences are often set at 5 years, no matter what the offense. Monetary restitution may also be required of any person convicted under this law.