Shutterstock
On Sept. 28, 2018, the U.S. Commodity Futures Trading Commission (CFTC) announced the formation of an “Insider Trading and Information Protection Task Force” (CFTC Task Force) within the agency’s Enforcement Division. “CFTC Charges Block Trade Broker with Insider Trading,” CFTC (Sept. 28, 2018). Twelve days later, former U.S. Attorney for the Southern District of New York Preet Bharara and U.S. Securities & Exchange Commission Commissioner Robert Jackson announced the formation of a separate task force (Bharara Task Force) aimed at insider trading in the securities markets. Preet Bharara & Robert J. Jackson Jr., “Insider Trading Laws Haven’t Kept Up With the Crooks,” N.Y. Times (Oct. 9, 2018).
The development of both derivatives- and securities-centric task forces to address insider trading signals intensified regulatory focus on this area of law across financial markets. Indeed, in announcing the CFTC Task Force, CFTC Enforcement Division Director James McDonald—who previously served as a prosecutor in the U.S. Attorney’s Office for the Southern District of New York, which has brought many of the most significant insider trading prosecutions—stressed that the CFTC “will thoroughly investigate and, where appropriate, prosecute instances in which individuals have abused access to confidential information—for example, by misappropriating confidential information, improperly disclosing a client’s trading information, front running, or using confidential information to unlawfully prearrange trades.” The Bharara Task Force was formed with the stated objective of tightening up perceived laxities and gaps in current insider trading law by proposing regulatory and legislative reforms.
