Recently, a former New York attorney general and governor commented on the difficulty of charging the CEOs of Wall Street firms with insider trading and other white collar crimes. Many hedge fund players on Wall Street were tried and convicted of the felony of insider trading, and the turmoil within these companies substantially damaged the economy. Many of these companies entered into expensive monetary settlements, while few of the CEOs were punished. There is a strong sentiment that the prosecutions did not address the main structural issues within the financial community that led to the banking crash of 2008.

However, there have been some successful prosecutions of company heads for insider trading. For example, authorities have convicted a ring of hedge fund managers for insider trading that included the leader of the hedge fund Galleon Group, a former leader of McKinsey & Co. and a Goldman Sachs board member. The main obstacle to prosecuting these felonies is that they are not easy to pin on the CEOs as crimes, as there is often little solid proof of their involvement.

Insider trading is a form of white collar crime that involves a person with inside information about a company or an investment trading on that information in the stock market in violation of their duties. This felony falls under the category of securities fraud, and is treated as a serious crime by authorities. Those convicted of insider trading may face jail time and fines to repay the money.

Anyone accused of insider trading or any other white collar crime is entitled to a vigorous criminal defense. It’s not enough for a prosecutor looking for headlines to lob accusations at anyone who may be personified as a “Wall Street tycoon.”

Source: The Daily Beast, “Eliot Spitzer: Busting CEOs on Insider Trading is the Tough Job,” Daniel Gross, Nov. 29, 2012.