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The Biggest Wall Street Insider Trading Scandals

BIGGEST INSIDER TRADING SCANDALS IN HISTORY 1986 LEGEND: $10 MILLION $1 MILLION $ $100,000 MONEY MADE Boesky earned a hefty $50 million while Levine's biggest trade earned him $2.69 million THE SCAM IVAN BOESKY DENNIS LEVINE Investment Banker Dennis Levine, a managing director at firm Drexel Burnham Lambert (DBL), provided insider tips, scoring paydays for both himself and others $50 MILLION $2.69 MILLION PAY UP Levine turned himself in after the SEC notified the head of DBL Ivan Boesky agreed to pay $100 million to the government to settle civil charges that he traded stocks illegally 2001 Boesky also plead guilty to one criminal count and provided evidence against colleagues MONEY MADE $228,000 in dumped stock THE SCAM Founder of ImClone, Sam Waksal, informed friends and family to sell their shares in ImClone based on insider information. MARTHA STEWART $228,000 Stewart, a friend of Waskal, sold $228,000 worth of ImClone biotech stock the next day PAY UP Martha Stewart was found guilty in 2004 of conspiracy, obstruction of an agency proceeding, and making false statements to federal investigators 2001 She ultimately spent 5 months prison MONEY MADE Netted $2.1 million for his hedge fund THE SCAM ARTHUR SAMBERG Art Samberg, a Former Pequot Capital CEO, emailed blatant requests to David Zilkha of Microsoft for insider information about the company $2.1 MILLION PAY UP Samberg paid the SEC $28 million Pequot was forced to close by mid-2009 2005 MONEY MADE Dumped over $50 million in stock to avoid losses JOSEPH NACCHIO THE SCAM As Former Qwest Communications chief, Nacchio failed to inform shareholders of problems within the company, instead giving positive financial projections while selling millions in stock $50 MILLION PAY UP Nacchio was convicted of 19 out of 42 counts of insider trading in 2007 2006 The Qwest's stock price collapse led to thousands of jobs and millions of dollars in retirement savings lost MONEY MADE His hedge fund bought 1.93 million shares in stock, earning $25.5 million THE SCAM Murakami learned non-public information that Livedoor, a financial services company, was aiming for a 5% stake in Nippon Broadcasting YOSHIAKI MURAKAMI $25.5 MILLION The Murakami fund purchased nearly 2 million shares He then sold the roughly 5 million Nippon Broadcasting shares to Livedoor, earning about 3 billion yen ($25.5 million) PAY UP Murakami was suspended for 3 years, paid a 3 million yen (about $29,000) fine, and 1.15 billion yen (about $11.2 million) in penalties Livedoor leader Takafumi Horie was convicted for securities fraud and sentenced to 2.5 years in prison THE FALL OUT OF THE SCANDAL ALSO INCLUDED: 6% 52% Japanese stockmarket lost 6% in 2 days Livedoor's value dropped 52% in 5 days Tokyo Stock Exchange closed early for the first time in history after the number of transactions exceeded its system capacity of 4.5 million a day 2007 MONEY MADE The Collottas earned only $9,000 in exchange for their tips but made others around $600,000 RANDI & CHRISTOPHER COLLOTTA The SEC called the case one of the most pervasive insider trading rings which in total may have profited as much as $15 million $15 MILLION THE SCAM Randi, a compliance officer for Morgan Stanley, leaked non-public information about planned mergers to her husband Christopher, a Florida day trader Leaks were also shared with trader Marc Jurman and 3 portfolio managers at Bear Sterns hedge fund PAY UP The Collottas plead guilty to one count of conspiracy to commit securities fraud and one count of securities fraud 2007 The couple was sentenced to 6 months of house arrest Randi Collotta also had to serve 30-60 days in the custody of federal prison authorities on nights and weekends MITCHEL GUTTENBERG DAVID TAVDY ERIK FRANKLIN $1 MILLION $4 MILLION $4 MILLION MONEY MADE THE SCAM Guttenberg was a manager in UBS's equity research department and had access to a daily list of UBS analyst recommendations before it was distributed to the public Guttenberg originally used the insider tips to pay off a $25k personal loan Guttenberg was paid hundreds of thousands of dollars for insider trading tips, possibly up to $1 million in cash Guttenberg traded the information using disposable cellphones and coded text Tavdy and Franklin made $4 million from the trades messages The scheme was caught by brokers at another firm who blackmailed the traders for $180,000 PAY UP 2009 Guttenberg plead not guilty to six counts of securities fraud and conspiracy MONEY MADE Called Wall Street's largest scandal in decades, Rajaratnam and 19 others earned $60 million in profits THE SCAM RAJ RAJARATNAM As a billionaire hedge-fund manager and founder of the Galleon Group, Rajaratnam swapped insider tips with a number of other traders, hedge fund managers, and key employees at IBM, Intel Corp., and McKinsey & Co. $60 MILLION PAY UP Rajaratnam was found quilty of 14 counts of conspiracy and fraud 2010 Also fined $92.8 million (the largest fine the SEC has imposed on an individual) Sentenced to 11 years in federal prison (the longest-ever sentence for insider trading) MONEY MADE Helped FrontPoint avoid $30 million in losses by leaking insider information THE SCAM Dr. Benhamou worked for HGSI (Human Genome DR. YVES BENHAMOU Sciences) and served on a Steering Committee that oversaw clinical drug trials for Albuferion, a potential hepatitis C treatment $30 MILLION The doctor leaked that the trials had negative results that would impact Albuferion's commercial potential FrontPoint portfolio manager Chip Skowron sold the hedge fund's 6 million shares in HGSI stock PAY UP Dr. Benhamou plead guilty to conspiracy, securities fraud, and other charges 2010 The doctor was sentenced to time served and 3 years supervised release MONEY MADE The brothers made $31.7 million with insider trading CHARLES SAM YLY Also sold over 14 million shares $31.7 MILLION $31.7 MILLION of issuer securities over 13 years for more than $550 million THE SCAM The billionaires exploited illegal non-disclosure of offshore issuer securities to make a transaction in Sterling Software based on non-public information that they would be selling the company, all while serving as company chairman and vice chairman The bulk of their profits came from trading stock in public companies, where the brothers sat on corporate boards, through hidden entities located abroad to conceal their ownership PAY UP Charles Wyly died in August 2011 while the investigation was still on-going 2012 Sam Wyly, age 79, has stated that the government and/or SEC would "get nothing" MONEY MADE Reaped in $276 million in profits and losses avoided from insider information THE SCAM Steve Cohen's firm, SAC Capital Advisors, worked closely with Mathew Martoma, a professor who worked on a clinical trial for an Alzheimer's drug. STEVE COHEN $276 MILLION The hedge funds bought shares from the drug companies involved in the trial and bet that the companies' shares would fall PAY UP SAC and its lawyers agreed to pay a record $616 million in penalties to the SEC to resolve two civil insider-trading lawsuits Investigators are revisiting the case and pursuing charges on Steve and SAC SOURCES TIM TIMOTHYSYKES.COM html ivanboesky www.forbes.cony2009/03/12/madoff-white-collancrime joe-nacchio-ordered-to-prison business/t/couple-pleads quilty-big-insider-trading scamy.UalyRSnILIU deal-to-cooperate-against-rajatqupta-7464/ CAO.ready.html /content/article/2007/03/01/AR2007030100853.html nefraud-business-wall-street-prisons slide11.html

The Biggest Wall Street Insider Trading Scandals

shared by timothysykes on Jul 11
Wall Street has been the backbone of our economy in the 20th and 21st century. It has made both millionaires and billionaires. It has turned normal blue collared folk into overnight millionaires. I...


Timothy Sykes




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