NEW YORK: US judges are imposing increasingly long prison terms for insider trading, a Reuters analysis shows. The rise is at least partly driven by the bigger profits being earned through the illegal schemes, defense lawyers said.
The trend is likely to continue on Monday when former SAC Capital Advisors manager Mathew Martoma is sentenced for what prosecutors have called the most lucrative insider trading case ever brought.
In the five-year period ending December 2013, insider trading defendants received an average sentence of 17.3 months, up from 13.1 months during the previous five years, or a 31.8 per cent increase, the analysis of 207 insider trading sentences shows. Cases that were reversed on appeal were excluded from the study.
The number of cases has increased, with 57pc of the sentences imposed in the past five years. The last three years alone have seen two record sentences.
In 2011, former billionaire and Galleon Group hedge fund founder Raj Rajaratnam received an 11-year sentence for an insider trading scheme that netted him $63.8 million in illicit profits. That was topped a year later when a New Jersey judge issued a 12-year term on Matthew Kluger, a former corporate lawyer accused of providing illegal tips in a $37m scheme.
