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 ?
Such a program may considerably reduce the possibility that a firm will be found "reckless" and therefore liable under ITSFEA for not being aware of probable employee violations.
Enforcement Remedies: ITSA, ITSFEA and Other Efforts by Congress to Sanction and Deter Insider Trading
The SEC Lobbies Congress for the Passage of the ITSFEA of 1988
18) The ITSFEA provided for bounties to informers of up to 10% of illegal insider-trading profits.
430) The ITSFEA amended section 20A of the 1934 Act to provide a private cause of action under the misappropriation theory in specific response to the Moss decision.