Insider Traders Face Longer Sentences As Judges Get Tough

Inside traders have more to fear when they stand before Manhattan federal judges for sentencing. Since Jan. 1, 2011, the judges have sent the average violator to prison for more than 22 months, according to an analysis of sentencing data by Bloomberg News. That was a 20 percent increase from the average term of 18.4 months during the previous eight years.

The harsher sentences come three years into a federal crackdown on insider trading on Wall Street. Since August 2009, federal prosecutors in Manhattan have charged 71 people with insider trading and won 65 convictions, with six cases still pending. Some of those convicted, including former Goldman Sachs Group Inc. (GS) director Rajat Gupta, are awaiting sentencing.

Judges in Manhattan federal court are also slightly more likely to send offenders to prison. Twenty-one of 36 defendants sentenced for insider trading since the start of 2011 -- or 58 percent -- were jailed. By comparison, 24 of the 43 defendants sentenced from 2003 through 2010, or 56 percent, lost their freedom. Of late, most of those who avoided prison cooperated with the government…..

Read all about it at http://www.bloomberg.com/news/2012-07-20/insider-traders-face-longer-sentences-as-judges-get-tough.html