Emelynn PAC Project

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Bachelor of Arts with Honors in Business and Finance Individual Project Topic: Corporate Governance; Insider Trading Case study on United States Securities Exchange Commission -and infamous cases of insider trading Module 279ACC Date: May 2016

Transcript of Emelynn PAC Project

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Bachelor of Arts with Honors in Business and Finance Individual Project

Topic: Corporate Governance; Insider Trading Case study on United States Securities Exchange Commission

-and infamous cases of insider trading

Module 279ACC

Date: May 2016

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Table of content

1. Introduction----------------------------------------------------------------------- 32. Literature Review---------------------------------------------------------------- 4-8

2.1. How this three insider trading case came by, in what way does individual took part in it. ----------------------------------------- 4-6

2.2. How are they charge by the U.S Securities and Exchange Commissions and what sentences it comes with? ------------------------------------------------- 6-7

2.3. How are laws written and change in order to furtherdeter insider trading: United States ------------------------------------------------- 7-8

3. Research Question and Objective---------------------------------------------- 8-93.1. Research Question --------------------------------------------------- 83.2. Research Objective--------------------------------------------------- 9

4. Research Methodology---------------------------------------------------------- 9-104.1. Research Design------------------------------------------------------ 94.2. Data Analysis--------------------------------------------------------- 94.3. Data collection-------------------------------------------------------- 94.4. Limitation-------------------------------------------------------------- 9-10

5. Bibliography --------------------------------------------------------------------- 10-13

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Introduction

Insider trading could be categories as a legal act or an illegal act, while, the legal act would be the employees of the companies buying and selling of it company’s stock; as for regulation purposes, the buying and selling of companies securities must be reported to the securities & exchange commission (SEC, 2013). While the illegal act would be the companies employees or related personnel that have access to the news (lawyers, consultant, accountant, shareholders), selling or giving of first-hand information of the corporation that is not due to be disclosed to the third party yet. And when the news is publicised to the public, it will cause fluctuation of company’s securities price worth (Staff, 2007). Thus, when employees or related personal of the company use the exclusive insider news to buy or sell company’s stock for profit (SEC, 2013). It is an act of unfairness, to use any part of the information that is not released to the public as to gain personal interest.

Over the years, many individual have tried and succeeded in doing insider traded; nevertheless, many of them are pin down by regulators. Still, there is always a limited at how the market can and could be regulated (SEC, 2013). Thus, many individually do still search for loopholes to fit in, or they risk being exposed. Some common way of insider trading are tipping off others (family members, friends or any related personnel), selling information, buy and sell personally; also, some other scenarios are that individuals got trick to tell of company current status without realizing though mostly after others have profited of the tip, they would buy gifts as to bribe the company employee for more information (Staff, 2007). Also, insider trading is not limited by this few method.

Further down this research a study of some notorious cases of insider trading will be used ask to have a better understanding of insider trading. Also allowing us to know how insider trading is done and what individuals gain from taking part in an insider deal. What charges and penalization they get at the end.

Those notorious cases of insider trading would be Martha Stewart and Broker Peter Bacanovic, where Martha Stewart allegedly got warned by her broker to sell her stock of ImClone before it plunges into deficits (SEC, 2003). As Martha Stewart share the same broker with the CEO of ImClone, which the CEO also sold off his and his daughter shares before negative news came out and caused its stock price to plunge (Hays, 2003).

Also, there is also the $15 million scam one of the biggest insider tradings in recent years (NBC, 2007) by Mitchel S. Guttenberg, David M. Tavdy, Erik R. Franklin and 11 others individuals. This 15 million insider trading start on when Mitchel S. Guttenberg, then executive director of UBS would tip or sell out information on stock analysts by UBS to other hedge fund managers (SEC, 2007)..

Lastly, not forgetting Raj Rajaratnam CEO of once most promising hedge fund firm in America, which manage $6.5b of the fund at its peak. Rai Rajaratnam is found the have profited near $64m by using the tips that other hedge fund managers give, this case also involve ex-employees of Goldman Sach, IBM, and Mckinsey (Glovin, Hurtado, and Van Voris, 2011).

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2. LITERATURE REVIEW2.1 How this three insider trading case came by, in what way does individual took part in it2.2 How are they charge by the U.S Securities and Exchange Commissions and what sentences it

comes with?2.3 How are laws written to deter insider trading: United States

2.1 How this three insider trading case came by, in what way does individual took part in it.

2.2 Martha Stewart Case study An in-depth view of Martha Stewart case to which that was reported that she avoided losing $45,843, by selling her stocks of a biotech company, ImClone (Leite, 2012). Which she was tipped off by her broker Peter Bacanovic from Merrill Lynch, though the broker was not being told any insider news of ImClone but he is also the broker for the CEO of ImClone. Thus, when the CEO of ImClone, Sam Waksal sold off $5 million stakes of his company together with his daughter's full holding; Peter Bacanovic realize that some bad news might be going to hit the company and cause the share price to plunge (Hays,2003). He then asks his assistant to tell and warned Martha Stewart about ImClone, which she then sell off her stakes to prevent losses (ress, 2004). Which is also against the company protocol, whereby employees are disallowed to reveal client transactions or use it to alter other client’s trade base on other client’s transaction (Neleman, Images, and Koba, 2012). After two days after that news of ImClone Company’s drug being denied by the Food and Drug Administration of U.S came out, the company share price drop 16% (AP, 2004).

Thus, Stewart became a part of the insider trading the moment she was tip off by her broker, which understand what is happening when the CEO of ImClone sold off his stakes in the company (Hays, 2003). Though she is not penalized harshly by the SEC, as she did not volunteer or got the information herself. Whereas she is only being penalized by the fact that she tried to cover up on the fact that she is tip off by her broker (Leite, 2012).

2.1.1 Mitchel S Guttenberg Case study While for the insider trading scam by Mitchel S. Guttenberg was that when he was then still UBS Executive Director, he uses his insider information as a member of the stock review committees; to sell it off to other investors or hedge fund managers for profit during a time span of 4 years (Goldstein, 2007). As being a stock review committees he has the means of to review the changing of analyst’s recommendation of securities (Reuters, 2008). He uses his first-hand, not yet publicize news of stock rating by the UBS analysts that when it publicize it will affect the stock price and worth of the company. At which when he got the yet publicize news, he sold it to Erik Franklin and David Tavdy for pice tag of over hundred thousands of dollars (SEC, 2007). Which when they get the yet publicize news, they would go on the buy stocks of that corporation that their rating is going to be increased (SEC, 2009). After that when the new of the corporations

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rating going to increase is publicize, they then sell it off for profit. An example is when Guttenburg know that his in-house analyst is giving Goldman Sach a better rating, he sold this piece of news off to Tarvy and Franklin (SCCE, 2010). Which then Tavdy when on to buy 7,300 shares of Goldman Sachs, which he then sold the stock off on the day after the upgrade was publicized; which he gain a profit of $20,000 (SCCE, 2010). All of the insider news Guttenberg provided has been used in by individual to gain an approximately $17.4m in total (Reuters, 2015). An example of how this insider scheme worked is shown in the diagram below.

2.1.3 Raj Rajaratnam Case Study As for Raj Rajaratnam, a New York hedge fund manager who is also the founder of Galleon group, once known for its fast continuous trading and its knowledge in the technology industry; that allowed him to gain huge profit and also made him a billionaire (Biography, 2016). Though now he is

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known for being part of creating one of the biggest insider trading case in recent years (Hurtado, Glovin, and Helyar, 2012). Thus, Rajaratnam was convicted and sentenced to 11 years of jail time and the U.S. Securities and Exchange Commission estimated that this insider trading scam have profited more than $25m in total (Goub, 2016). Also, many other employees of reputable companies are involved in tipping Rajaratnam (SEC, 2009). As shown in the picture below.

One of the insider trading that he is involved happens when Rajat Gupta, former director at Goldman Sachs also the head of McKinsey consulting (Pavlo, 2012). At the same time he served on the board of Procter & Gamble, allegedly told him that Warren Buffet, CEO of Berkshire Hathaway has make a deal to buy $5b worth of Goldman Sachs’s shares (Hurtado, Glovin, and Helyar, 2012). While this news was not publicized after the New York Stock Exchange have closed, Grupta has called Rajaratnam straight after the board meeting at Goldman Sach (Wachtel, 2011)). Thus allowing Rajaratnam to purchase shares of Goldman Sach, while soon after the new of Berkshire Hathaway’s acquiring of stock being announced; Rajaratnam sold off those shares and earned a profit of around $900,000 (Huneke, 2010).

2.2 How are they charge by the U.S Securities and Exchange Commissions and what sentences it comes with?

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2.2.1 Martha Stewart

Martha Stewart was convicted of four charges which all she is found guilty of (Scannell and Rose, 2004). Thus, she receives a sentence of five months in prison; together with a home confinement over a period of five months (Neleman, Images, and Koba, 2012). These sentences are the result of her giving a false statement and called this insider stock sale ‘a small personal matter’ (Hays, 2004). Also, she was placed on probation period of 19 months and was fined $30,000. At the same time, Stewart also stepped down from her position as chairman and chief executive of her own company Omnimedia Inc (Fox News,2003).

2.2.2 Mitchel S Guttenberg Case

For Mitchel S. Guttenberg case, he is sentenced 78 months in prison; at the same time he was fine $15.81m as a reflect of the earnings he gets by taking part in the insider trading (Chung, 2008). Also, he is barred from having a connection in future with any other broker, dealer, or investment adviser (SEC, 2009). While for David M. Tavdy, he is sentenced to 63 months in prison and to pay a fine of $10.3m as a penalty on the profit he bagged by taking part in the insider trading (Smythe, 2016). Also, he is barred from having a connection in future with any other broker, dealer, or investment adviser (FBI, 2011).

2.2.3 Raj Rajaratnam Case

For Rajaratnam, he was found guilty of 14 counts of conspiracy and securities fraud (FBI, 2011). Which bagged him 11 years of prison time; also to pay a $10m fine and forfeit $52.8m as reflect off an approximately $63.8m earnings by practicing insider trading as charged by the prosecutor (Stempel, 2015). While for Rajat Gupta, he is sentenced to two years in prison and to pay a fine of $5m; also being under supervision for one year (Rothfeld and Strumpf, 2012).

2.3 How are laws written and change in order to further deter insider trading: United States

2.3.1 Securities Exchange Act 1934

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Stated by the United States has written law named, ‘Securities Exchange Act 1934’ as to discourage individual insider of any corporation to use their insider information for own benefit. As Section 16 of the 1934 Act; it penalizes any insider that uses insider information to make short-term profit. Insider is defined as ‘people who are directly or indirectly is the beneficial owner of more than 10 percent of any class of any equity securities, which is registered or who is a director or an officer of the issuer” (Seitzinger, 2006). In which, every individual that qualify under insider must file a report with the Securities and Exchange Commission (SEC) as when he/she becomes a beneficial owner, director, or officer. If subsection (a) or (g) of section 30a of Act 1934 is violated, the issuer shall not be fined more than $2,000,000; and shall be subjected to a civil penalty of not more than $10,000. While any officer, director, employee or agent of an issuer, or stockholder acting on behalf of such issuer shall be fined not more than $100,000, or imprisoned not more than 5 years, or both. At the same time, they shall be subjected to a civil penalty of nor more than $10,000 (Code of Federal Regulation, 2009).

2.3.2 Insider Trading Sanctions Act of 1984 This sanction act as a reinforcement act that is ratified as it trusts that ‘insider trading threatens markets by undermining the public’s belief of a honest and fair securities market where all partaker go by the same rule.’ Thus, this improvised legislation provides better deterrence against violators. At the same time, it also allows the commission to take actions on individuals that, were believe to have bought or sold a security while holding pieces or nonpublic information. Thus, it increases jail terms for criminal securities law violations from originally five years to ten years; also with an increase of criminal fines from originally $100,000 to $1,000,000. Also, companies or organization that are involved can be fined from $500,000 to $2,200,000 (Seitzinger, 2002).

3 RESEARCH QUESTION AND OBJECTIVE

Dissertation: Insider Trading

Research Question: 3.1.1 Do the charges justify what Martha Stewart, Raj Rajaratnam, and Mitchel S. Guttenberg

did? As referred back to 2.2, it justifies the fact that the months that they are jailed, and fine are related to the amount that they earned from the insider trading. As smaller earning Martha Stewart was only jailed for 5 months, bigger earner like Raj Rajaratnam was jailed for 132 months and fined $10m and fortify $52.8m, while Mitchel S. Guttenberg was jailed for 78 months and fined $15.81m.

3.1.2 How those law that is being further vetted are helping to deter insider trading as compared to the original law created?

As referring to 2.3.2, the congress has agreed to further regulate the securities market, in the belief that by reinforcement would keep up with public’s expectations, of having an honest and fair securities market where all partaker go by the same rule. Which lead to increasing of jail terms for securities law violation as to hope that it will fend off more insider trading, thus, it is believable that laws

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are vetted from time to time as to make sure it will have its continuing effect on penalizing on any future offender; at the same time petrify any individual that is about to commit this crime.

3.1.3 Does inside trading limit to a single participant? As from the 3 case study, it is understandable that insider trading does not usually involve only one participant. Therefore, a conclusion can be drawn to believe that insider trading usually involves more than a single individual, as refer back to the 3 case study; it is shown and proven that insider trading will involve 2 or more individual.

3.2 Research Objective: 3.2.1 To understand the effectiveness of regulating the market and penalizing individuals3.2.2 What law are used to penalize violators - insider trading?3.2.3 As per usually, how many individuals could be involved in an insider trading ring?

4 RESEARCH METHODOLOGY4.1 Research Design

Descriptive research is used in the research as to find out more about the about insider trading and to understand how it works, and to have an end conclusion about the topic. Whereas in this case it’s about to find out more about insider trading ring, how it works, how legislation takes them down and how are they penalized. As per usually, descriptive studies are the better approach in collecting information or how it happens and what happen when it exist. Also, as referred from Bickman and Rag (1998), which advised that descriptive studies can or could answer ‘what is’ or ‘what was,' while experiment can or could typically answer ‘why’ or ‘how’ (ORI-HHS, 2006) Also, in particular, a case study strategy is used in researching information for better understanding of insider trading as it allows researchers to study a cluster or real-life act. As it allows us to observe thru archival information, ‘how’ and ‘what,' also, a descriptive case study can be divided into typical or selective. In which selective case study stay on a certain issue or type of behavior, thus, allowing us to understand its process (Schell, 1992). Which we could then use the understanding of the process to answer the ‘how’ and ‘why’ of the event and have a conclusion in the end.

4.2 Data collection Secondary data collection is used for this research, in which it mean using data that was collected previously by other researchers; as secondary data analysis have many advantages in aiding in information gathering for research.- It saves time and money, as it will be less expensive as compared to gathering information

over again (Saint-Germain, 1998). As to consolidate international and different years of data would take a longer time span as compared to using or secondary data (Koziol and Arthur, 2011).

- It might also be of better value or quality, as over the year that certain piece of information or data, are being consolidated into an essential data that is formed by many different data or information (Koziol and Arthur, 2011).

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4.3 Data Analysis In this research data are being compared - and – contrast, as to find out how different or similar are those offenders charge and sentence by law. In which, secondary data will provide a clear view of what individuals did and how they're penalized.

4.4 Limitation The drawback of this research proposal might be the intensify usage of secondary data, as secondary data are not the first-hand encounter. Also, secondary data that are sourced are not targeted from start to answer the same as to this research paper. Thus, modification is made to allow those data to match furthermore with the research question. Thus, after the modification, it might limit the new observation or understanding of this certain topic. Also, as data are being sourced online, it is nearly impossible to know that how fair or biased are the writer or journalist; when they consolidate the data and how those data are being sourced. Therefore, the quality of the data might be questioned from time to time.

REFERENCE AP (2004) USATODAY.com - Timeline of Martha Stewart scandal. Available at: http://usatoday30.usatoday.com/money/media/2004-03-05-stewart-timeline_x.htm (Accessed: 16 May 2016). In-line Citation: (AP, 2004) Biography (2016) Raj Rajaratnam Biography. Available at: http://www.biography.com/people/raj-rajaratnam-17175738 (Accessed: 16 May 2016). In-line Citation: (Biography, 2016)Chung, J. (2008) Ex-UBS executive jailed for insider trading. Available at: http://www.ft.com/cms/s/0/af6a1876-aa05-11dd-958b-000077b07658.html#axzz47agnKPGX (Accessed: 3 May 2016). In-line Citation: (Chung, 2008)Code of Federal Regulations (2009) US insider trading laws - insider trading by congress - ProCon.Org. Available at: http://insidertrading.procon.org/view.resource.php?resourceID=1516 (Accessed: 9 May 2016). In-line Citation: (2009) Drew, R. (2007) Couple pleads guilty in big insider trading scam. Available at: http://www.nbcnews.com/id/18594741/#.Vw0oGjB96Uk (Accessed: 12 April 2016). In-line Citation: (Drew, 2007)FBI (2011) Trader sentenced to more than Five years in prison in connection with UBS insider trading scheme. Available at: https://www.fbi.gov/newyork/press-releases/2009/nyfo022409.htm (Accessed: 16 May 2016). (FBI, 2011)FBI (2011) Hedge fund billionaire raj Rajaratnam found guilty in Manhattan federal court of insider trading charges. Available at: https://www.fbi.gov/newyork/press-releases/2011/hedge-fund-billionaire-raj-rajaratnam-found-guilty-in-manhattan-federal-court-of-insider-trading-charges (Accessed: 16 May 2016). In-line Citation: (FBI, 2011)Fox News (2003) Martha Stewart to step down from MSLO after fraud, obstruction indictment. Available at: http://www.foxnews.com/story/2003/06/05/martha-stewart-to-step-down-from-mslo-after-fraud-obstruction-indictment.html (Accessed: 16 May 2016). In-line Citation: (Fox News, 2003)Glovin, D., Hurtado, P. and Van Voris, B. (2011) Rajaratnam guilty on all counts in U.S. Insider-trading case. Available at: http://www.bloomberg.com/news/articles/2011-05-11/rajaratnam-is-found-guilty-of-

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all-counts-in-galleon-insider-trading-trial (Accessed: 23 April 2016). In-line Citation: (Glovin, Hurtado, and Van Voris, 2011)Goldstein, M. (2007) The century’s big insider-trading bust. Available at: http://www.bloomberg.com/news/articles/2007-03-01/the-centurys-big-insider-trading-bustbusinessweek-business-news-stock-market-and-financial-advice (Accessed: 25 April 2016). In-line Citation: (Goldstein, 2007)Goub, T. (2013) Former Goldman Sachs director raj Rajaratnam ordered to pay $13.9M penalty to settle SEC insider trading suit. Available at: https://www.lexisnexis.com/legalnewsroom/securities/b/securities/archive/2013/07/18/former-goldman-sachs-director-ordered-to-pay-13-9m-penalty-to-settle-sec-suit.aspx?Redirected=true (Accessed: 16 May 2016). In-line Citation: (Goub, 2013)Hays, C.L. (2003) PROSECUTING MARTHA STEWART: THE OVERVIEW; Martha Stewart indicted by U.S. On obstruction. Available at: http://www.nytimes.com/2003/06/05/business/prosecuting-martha-stewart-overview-martha-stewart-indicted-us-obstruction.html?pagewanted=all (Accessed: 16 May 2016). In-line Citation: (Hays, 2003)Hays, C.L. (2004) MARTHA STEWART’S SENTENCE: THE OVERVIEW; 5 months in jail, and Stewart vows, ‘I’ll be back’. Available at: http://www.nytimes.com/2004/07/17/business/martha-stewart-s-sentence-overview-5-months-jail-stewart-vows-ll-be-back.html (Accessed: 30 April 2016). In-line Citation: (Hays, 2004)Huneke, S.C. (2010) Raj Rajaratnam insider trading case - financial ethics. Available at: http://sevenpillarsinstitute.org/case-studies/raj-rajaratnam-and-insider-trading-2 (Accessed: 25 April 2016). In-line Citation: (Huneke, 2010)Hurtado, P., Glovin, D. and Helyar, J. (2012) Rajat Gupta convicted for giving Rajaratnam inside tips. Available at: http://www.bloomberg.com/news/articles/2012-06-15/rajat-gupta-convicted-of-insider-trading-by-u-s-jury (Accessed: 16 May 2016). In-line Citation: (Hurtado, Glovin, and Helyar, 2012)Insider trading (2013) Available at: https://www.sec.gov/answers/insider.htm (Accessed: 12 April 2016). In-line Citation: (Insider trading, 2013)Koziol, N. and Arthur, A. (2011) An Introduction to Secondary Data Analysis. Available at: http://r2ed.unl.edu/presentations/2011/RMS/120911_Koziol/120911_Koziol.pdf (Accessed: 12 May 2016). In-line Citation: (Koziol and Arthur, 2011)Leite, J. (2012) What Martha Stewart did wrong. Available at: http://coveringbusiness.com/2012/05/15/what-martha-stewart-did-wrong/ (Accessed: 23 April 2016). In-line Citation: (Leite, 2012)Neleman, H., Images, G. and Koba, M. (2012) Insider trading: CNBC explains. Available at: http://www.cnbc.com/id/43583339 (Accessed: 16 May 2016). In-line Citation: (Neleman, Images, and Koba, 2012)ORI-HHS (2006) Research design: Descriptive studies. Available at: http://ori.hhs.gov/education/products/sdsu/res_des1.htm (Accessed: 12 May 2016). In-line Citation: (2006)Pavlo, W. (2012) Ex-McKinsey boss, Rajat Gupta, sentenced to 2 years in federal prison. Available at: http://www.forbes.com/sites/walterpavlo/2012/10/24/ex-mckinsey-boss-rajat-gupta-sentenced-to-2-years-in-federal-prison/#6abb0494596b (Accessed: 16 May 2016). In-line Citation: (Pavlo, 2012)Press, T.A. (2004) Summary of case against Martha Stewart (washingtonpost.com). Available at: http://www.washingtonpost.com/wp-dyn/articles/A33838-2004Mar5.html (Accessed: 16 May 2016). In-line Citation: (Press, 2004)

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Reuters (2008) Judge sentences Ex-UBS exec to 6-1/2 years prison. Available at: http://www.baselinemag.com/c/a/Government/Judge-Sentences-ExUBS-exec-to-612-Years-Prison (Accessed: 16 May 2016). In-line Citation: (Reuters, 2008)Reuters (2015) 2 plead guilty for insider trading. Available at: http://www.nytimes.com/2008/02/28/business/28trader.html (Accessed: 25 April 2016). In-line Citation: (Reuters, 2015)Rothfeld, M. and Strumpf, D. (2012) Gupta gets Two years for leaking inside tips. Available at: http://www.wsj.com/articles/SB10001424052970203897404578077050403577468 (Accessed: 4 May 2016). In-line Citation: (Rothfeld and Strumpf, 2012)Saint-Germain, M.A. (1998) RESEARCH METHODS SECONDARY DATA ANALYSIS. Available at: http://web.csulb.edu/~msaintg/ppa696/696scond.htm (Accessed: 12 May 2016). In-line Citation: (Saint-Germain, 1998)Schell, C. (1992) The Value of the Case Study as a Research Stratagy. Available at: http://www.finance-mba.com/Case%20Method.pdf (Accessed: 12 May 2016). In-line Citation: (Schell, 1992)Scannell, K. and Rose, M. (2004) Martha Stewart is found guilty of all charges. Available at: http://www.wsj.com/articles/SB107833235519345426 (Accessed: 30 April 2016). In-line Citation: (Scannell and Rose, 2004)SCCE (2010) United States of America vs Mitchel Guttenburg & David Tavdy. Available at: http://www.corporatecompliance.org/Portals/1/PDF/Resources/past_handouts/Regional/2010/NY/S2H7_USvMitchelGuttenberg.pdf (Accessed: 16 May 2016).nIn-line Citation: (SCCE, 2010)SEC (2003) SEC charges Martha Stewart, broker Peter Bacanovic with illegal insider trading. Available at: https://www.sec.gov/news/press/2003-69.htm (Accessed: 19 May 2016). In-line Citation: (SEC, 2003)SEC (2007) Mitchel S. Guttenberg, Erik R. Franklin, David M. Tavdy, mark E. Lenowitz, Robert D. Babcock, Andrew A. Srebnik, Ken Okada, David A. Glass, Marc R. Jurman, Randi E. Collotta, Christopher K. Collotta, Q capital investment partners, LP, DSJ international resources Ltd. (d/b/a Chelsey capital), and Jasper capital LLC: Lit. Rel. No. 20022 / march 1, 2007. Available at: https://www.sec.gov/litigation/litreleases/2007/lr20022.htm (Accessed: 19 May 2016). In-line Citation: (SEC, 2007)SEC (2009) Press release: SEC charges billionaire hedge fund manager raj Rajaratnam with insider trading; 2009-221; October 16, 2009. Available at: https://www.sec.gov/news/press/2009/2009-221.htm (Accessed: 25 April 2016). In-line Citation: (2009)SEC (2009) Mitchel S. Guttenberg, Erik R. Franklin, David M. Tavdy, mark E. Lenowitz, Robert D. Babcock, Andrew A. Srebnik, Ken Okada, David A. Glass, Marc R. Jurman, Randi E. Collotta, Christopher K. Collotta, Q capital investment partners, LP, DSJ international resources Ltd. (d/b/a Chelsey capital), and Jasper capital LLC: Lit. Rel. No. 21086 / June 16, 2009. Available at: https://www.sec.gov/litigation/litreleases/2009/lr21086.htm (Accessed: 16 May 2016). In-line Citation: (SEC, 2009)SEC (2009) Mitchel S. Guttenberg, Erik R. Franklin, David M. Tavdy, mark E. Lenowitz, Robert D. Babcock, Andrew A. Srebnik, Ken Okada, David A. Glass, Marc R. Jurman, Randi E. Collotta, Christopher K. Collotta, Q capital investment partners, LP, DSJ international resources Ltd. (d/b/a Chelsey capital), and Jasper capital LLC: Lit. Rel. No. 21086 / June 16, 2009. Available at: https://www.sec.gov/litigation/litreleases/2009/lr21086.htm (Accessed: 19 May 2016). In-line Citation: (SEC, 2009)Seitzinger, M.V. (2006) Federation Of American Scientist - Congressional Research Service [CRS] Reports. Available at: https://www.fas.org/sgp/crs/misc/RS21127.pdf (Accessed: 8 May 2016). In-line Citation: (Seitzinger, 2006)

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Seitzinger, M.V. (2002) The information Warfare Site. Available at: http://www.iwar.org.uk/news-archive/crs/8043.pdf (Accessed: 9 May 2016). In-line Citation: (Seitzinger, 2002)Smythe, C. (2016) Ex-UBS exec gets 6 years in insider trading case. Available at: http://www.law360.com/articles/75381/ex-ubs-exec-gets-6-years-in-insider-trading-case (Accessed: 16 May 2016). In-line Citation: (Smythe, 2016)Smith, R., Scannell, K. and Davies, P. (2007) A ‘brazen’ insider scheme revealed. Available at: http://www.wsj.com/articles/SB117275753436823375 (Accessed: 16 May 2016). In-line Citation: (Smith, Scannell, and Davies, 2007)Staff, L. (2007) Insider trading. Available at: https://www.law.cornell.edu/wex/insider_trading (Accessed: 16 May 2016). In-line Citation: (Staff, 2007)Stempel, J. (2015) Raj Rajaratnam seeks to cut 11-year insider trading sentence. Available at: http://www.reuters.com/article/us-galleon-rajaratnam-idUSKBN0OP2EG20150609 (Accessed: 4 May 2016). In-line Citation: (Stempel, 2015) Wachtel, K. (2011) Guess how many seconds Rajat Gupta waited before calling raj after Blankfein told him Q4 2008 earnings were bad. Available at: http://www.businessinsider.com/rajat-gupta-called-raj-rajartnam-as-soon-as-he-discovered-berkshire-hathway-investment-2011-3?IR=T&r=US&IR=T (Accessed: 16 May 2016). In-line Citation: (Wachtel, 2011)