"These trades raise questions about several different insider trading laws," wrote the Members of Congress, noting restrictions dating back to the
Insider Trading Sanctions Act of 1984 and the STOCK Act of 2012 that ban individuals from using material, nonpublic information to benefit themselves through securities trading, punishable both by civil and criminal penalties.
(22.) Since 1980, Congress has enacted three significant insider trading-related laws: the
Insider Trading Sanctions Act of 1984 ("ITSA"), Pub.
(95.) See infra text accompanying notes 227-34 (discussing the
Insider Trading Sanctions Act of 1984 and the House Committee on Commerce and Energy's mandate for a follow-up study by the SEC).
The
Insider Trading Sanctions Act of 1984 (168) did not revise the judicial approach to insider trading liability or expand the scope of the prohibition but merely made minor modifications to insider trading liability, including a prohibition on the trading of options and other derivatives in circumstances in which it would be illegal to trade stock and a provision providing for treble damages.
Over the years, the US Congress has substantially increased the penalties for insider trading by enacting the
Insider Trading Sanctions Act of 1984 and the Insider Trading and Securities Fraud Enforcement Act of 1988.
The
Insider Trading Sanctions Act of 1984 was enacted because of the belief that
Sarbanes) (describing the
Insider Trading Sanctions Act of 1984 as "much needed legislation to deter insider trading, a market abuse which threatens investor confidence in the fairness and integrity of our capital markets").
In 1984 Congress passed the
Insider Trading Sanctions Act of 1984 (ITSA), which provides for up to three times the insiders' illegal profits in civil penalties and a tenfold increase in criminal penalties (from $10,000 to $100,000).
(44.) The
Insider Trading Sanctions Act of 1984 first authorized the SEC to impose civil fines in enforcement suits and also restricted the SEC with a statute of limitations.
Silver, C.B., 1985, "Penalizing Insider Trading: A Critical Assessment of the
Insider Trading Sanctions Act of 1984," Duke Law Journal (November), 960-1025.
Congress passed the
Insider Trading Sanctions Act of 1984 ("ITSA")(425) in response to increasing violations of the Exchange Act.(426) The ITSA subjects violators to disgorgement of up to three times the profits received from the illegal trade.(427)
Significant changes in regulatory sanctions during the 1980s, particularly passage of the
Insider Trading Sanctions Act of 1984, were designed to increase expected costs of illegal insider trading.
