Only Half of NY Insider Trading Charges Result in Incarceration

A lengthy new report from Bloomberg reveals just how beneficial cooperating with the prosecution can be in white collar crime cases. According to the article, nearly half of all those defendants sentenced in Manhattan federal court over the past several years avoided prison time by working with the prosecutors.

While the article speaks specifically to federal cases, the same could likely be said for cases brought at the state level—prosecutors will compromise on smaller cases to “get the big guy”.

Prosecutions for insider trading in New York have been stepped up in the last few years. More than 30 people have been charged since 2009, many of them accused in schemes that netted millions. But, as one expert points out, the lower the dollar amount involved, the less serious the fraud, and the smaller chance a defendant will serve time.

“If you engage in accounting manipulation, you’re deceiving the entire investment community in that security, and that’s deemed to be very serious. But if you’re an insider trader who made $12,000 on a couple of sales, that’s a much more limited fraud.”

The federal sentencing guidelines take into account the amount of money the defendant made off of the fraud, their willingness to admit fault, and their criminal history. Obviously, if you admit your fault and work with the prosecution to uncover what truly happened, you will improve your chances of a lenient sentence.

What we’re talking about here is nothing more than plea arrangements. The defendant agrees to cooperate and plead guilty to at least some of the charges against them and the prosecution agrees, in exchange, to recommend a lenient sentence or even drop some of the charges. These happen in all criminal courts, and happen far more often than trials.

People have a tendency to think that white collar crimes, like fraud, are treated with a slap on the wrist when compared with other “street crimes”. This is true in some situations, but not all. If you are facing charges of embezzlement, identity theft, or any other similar fraud crime, you can bet the prosecutor’s first plan of attack is to throw the book at you.

Usually, with the assistance of a defense attorney, a defendant can work out a favorable plea agreement with the prosecution. But, if they can’t and the case goes to trial, an experienced defense lawyer then works to defend their client’s best interest and seek the best possible results—whether that be a not guilty verdict by the jury or getting the charges dropped altogether.

If you are facing charges or under investigation for fraud, contact us today for a free consultation.

Leave a Reply

Your email address will not be published. Required fields are marked *