Via Bloomberg (H/T SOX First).
Almost half of the 43 defendants who were sentenced in Manhattan federal court in the past eight years for insider trading avoided a prison term, with many never seeing the inside of a jail cell because they cooperated with prosecutors.
Nineteen who were sentenced since 2003, or 44 percent, weren’t incarcerated, an analysis of court cases by Bloomberg showed. Of the remainder, the average defendant got a prison term of 18.4 months. The greater the profit made on illegal trades, the longer the sentence. The longest term was 10 years. Danielle Chiesi, who pleaded guilty yesterday for her role in the Galleon Group LLC hedge fund insider-trading scandal, faces between 37 and 46 months in prison.
If you engage in accounting manipulation, you’re deceiving the entire investment community in that security, and that’s deemed to be very serious,” Kirby Behre, a partner at Paul, Hastings, Janofsky & Walker LLP in Washington and co- author of “Federal Sentencing for Business Crimes,” said yesterday in a phone interview. “But if you’re an insider trader who made $12,000 on a couple of sales, that’s a much more limited fraud.”
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