The U.S. criminal law of insider trading and market manipulation

This chapter summarizes the current state of U.S. law with respect to criminal prosecutions for insider trading and market manipulation. The chapter begins with a brief explanation of several unusual aspects of U.S. criminal law, and the U.S. legal system in general, that impact criminal securities fraud cases. The primary focus of the chapter is on federal criminal law, including the federal statutory framework as well as the relevant federal regulations issued by the Securities and Exchange Commission (SEC). The chapter describes the most important decisions of the U.S. Supreme Court that have helped to shape the law of insider trading and market manipulation. The chapter discusses some enforcement priorities of the SEC and the U.S. Department of Justice that have recently guided the exercise of federal investigative and prosecutorial discretion, and identifies several new initiatives under the current administration of President Donald Trump that may affect those enforcement priorities. The chapter ends with a brief discussion of the cooperative role of state criminal law and state prosecutors in combatting insider trading and market manipulation.