Insider Trading and Securities Fraud Enforcement Act of 1988

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Insider Trading and Securities Fraud Enforcement Act of 1988

In the United States, a 1988 law that significantly increased the penalties associated with insider trading and securities fraud. For example, for insider trading, the Act provided for fines of up to three times the profit an offender made as a result of the inside information. It also provided for cash payments to "whistle-blowers" and civil penalties for managers who, knowing that persons working under them are likely to engage in insider trading, fail to act.

Insider Trading and Securities Fraud Enforcement Act of 1988

The federal legislation that increased the potential liabilities associated with insider trading and other fraudulent activities. This act provides informers with cash awards, allows individuals who claim damages to file suit, and encourages companies to implement improved internal controls.
References in periodicals archive ?
18) The ITSFEA provided for bounties to informers of up to 10% of illegal insider-trading profits.
Moreover, ITSFEA increased the maximum criminal penalties to $1 million and the maximum jail sentence to ten years.
Enforcement Remedies: ITSA, ITSFEA and Other Efforts by Congress to Sanction and Deter Insider Trading
While a law firm is neither a broker-dealer or investment advisor as defined by ITSFEA, the SEC has taken the position that a law firm has an affirmative obligation to protect material, non- public information.