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Zorluk: OrtaInsider Trading and Misuse of Material Nonpublic Information

Under federal securities regulations, the maximum civil penalty that can be assessed against an individual found liable for insider trading is equal to one times (100%) the profit gained or loss avoided.

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The statement is false. Under federal insider trading laws, maximum civil monetary penalties can equal up to three times (treble damages) the profit gained or loss avoided, over and above the disgorgement of profits.
The statement is false because federal insider trading regulations authorize civil monetary penalties of up to three times (treble damages) the profit realized or loss avoided, rather than limiting civil fines to a one-to-one ratio.

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1
Identify the statutory provisions for civil penalties under insider trading regulations.
Federal insider trading rules under ITSFEA permit civil monetary fines in addition to disgorgement of profits.
Distinguishing between restitution (disgorgement) and statutory civil penalties is essential to determine maximum legal liability.
2
Determine the maximum multiplier allowed for civil monetary penalties.
The SEC may seek civil penalties up to three times (300%) the profit gained or loss avoided.
Treble damages serve as a financial deterrent against the misuse of material nonpublic information.

Anahtar Kavram

Civil Penalties and Remedies under Insider Trading Law
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Insider Trading and Misuse of Material Nonpublic Information