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It's Now An Extra Good Idea Not To Insider Trade

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If the previous odds of a considerable stay in jail didn't deter you before...

The heaviest prison terms for insider trading have been handed out over the last three years. Mr. Rajaratnam received an 11-year prison sentence, which was later topped by the 12-year prison term for Matthew Kluger, a lawyer who tipped client information for several years. Mr. Martoma fits into this pattern of increased punishments, although his actual time in prison will be closer to seven years after credit for good behavior and release to a halfway house. What explains the stiffer sentences for a crime committed by defendants who are often from the upper strata of society and whose victims experienced no significant losses, unlike the Ponzi scheme perpetrated by Bernard L. Madoff, which resulted in a 150-year prison term? One reason is a general trend toward longer prison terms for white-collar crimes, unlike the move to reduce punishment for some types of lower-level drug offenses. The median sentence in federal courts for economic crimes like fraud increased to 24 months from 18 months from 2009 through 2013. Although criticism has been growing about the high incarceration rate in the United States, it is rarely directed at the punishment of white-collar offenders, especially since the financial crisis, when the Justice Department brought no significant prosecutions of individuals.

Punishments for Insider Trading Are Growing Stiffer [Dealbook]