Manhattan U.S. Attorney Preet Bharara pushed for stiffer punishment for insider-trading Wednesday during a hearing of the U.S. Sentencing Commission, the Wall Street Journal reported.
Bharara said that “the nature and scope of insider-trading activity has evolved,” yet sentencing guidelines have remained the same. He added: “The guidelines as they stand may be letting some defendants in some cases off with lighter sentences than they deserve.” He did not say how he believed the guidelines should be updated.
Bharara urged the commission to implement a higher sentencing range for criminals involved in complex insider-trading enterprises. He also said there should be tougher penalties for people who don’t make a profit from insider trading only because of external events that influence the market, like the popular revolt in Egypt. Punishing a crime based only on the amount of profit “creates the potential for a defendant to commit multiple and brazen acts of insider trading” without facing punishment, Bharara said.
U.S. District Judge Beryl Howell, a member of the commission, said she was “disappointed” Bharara didn’t offer more specific details to indicate DOJ’s “willingness to do the hard work” of updating the sentencing guidelines, the newspaper reported. Howell is a a former Assistant U.S. Attorney for the Eastern District of New York.
Bharara has been pursuing a web of insider trading cases linked to hedge fund founder Raj Rajaratnam and so-called “expert networks” that consult with investment funds.
“Any changes to the sentencing rules are likely years away and wouldn’t affect the current cases,” according to the Journal.