A New York-based investment banker for Wells Fargo Securities and nine others have been civilly charged by the Securities and Exchange Commission with insider trading, after it was allegedly discovered that he was passing confidential information to a "phone tree" of his friends and their friends.
The federal government has recorded thousands of taped phone conversations that they have been using in their case against white collar defendants. However, a federal judge criticized white collar investigators for their often-sloppy wiretap management in the case against Craig Drimal, proving that this type of evidence can pose challenges in the courtroom.
Broadly defined, insider trading is trading stocks based on material, non-public information. Insider trading is both a crime and a civil offense and the Securities and Exchange Commission can elect to enforce the insider trading laws by seeking fines as well as prison time. Insider trading, like most white collar crimes, is a felony that carries the possibility of a lengthy prison sentence.
A three-year investigation by federal prosecutors, the FBI and the Securities and Exchange Commission is beginning to make headlines across the nation. The investigation has been focused on possible insider trading by consultants, investment bankers, hedge fund managers, mutual fund managers, and analysts across the nation. The investigation is being characterized as one of the biggest insider-trading probes ever.