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Further Reading
  • Den of Thieves
    Den of Thieves
    by James B. Stewart
  • The Predators' Ball: The Inside Story of Drexel Burnham and the Rise of the Junk Bond Raiders
    The Predators' Ball: The Inside Story of Drexel Burnham and the Rise of the Junk Bond Raiders
    by Connie Bruck
  • License to Steal: The Untold Story of Michael Milken and the Conspiracy to Bilk the Nation
    License to Steal: The Untold Story of Michael Milken and the Conspiracy to Bilk the Nation
    by Benjamin J. Stein
  • Inside Out: An Insider's Account of Wall Street
    Inside Out: An Insider's Account of Wall Street
    by Dennis B. Levine, William Hoffer
  • Martha: On Trial, in Jail, and on a Comeback
    Martha: On Trial, in Jail, and on a Comeback
    by Robert Slater
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NEWS

The Watchdogs

 

The task of detecting and catching illegal insider trading is delegated to a few major regulatory institutions:

Securities and Exchange Commission (SEC), created during the Great Depression in response to the failure of the nation's financial institutions to regulate themselves properly, states in its mission statement that it "overseas all the key participants in the securities world, including securities exchanges, securities brokers and dealers, investment advisors, and mutual funds. Here the SEC is concerned primarily with promoting the disclosure of important market-based information, maintaining fair dealing, and protecting against fraud." The SEC typically plays the lead role in detecting insider trading and instigating cases. 

Federal Bureau of Investigation works closely with the SEC on insider trading cases as the lead enforcement agency responsible for investigating financial crimes.

U.S. Justice Department plays a lead role in prosecuting insider trading cases, including trying such cases in court if there is no plea or settlement.

Financial Industry Regulatory Authority (FINRA), created in July 2007 through the combination of National Association of Securities Dealers (NASD) and the member regulation, enforcement and arbitration functions of the New York Stock Exchange, is the largest independent regulator for all securities firms doing business within the United States.

NYSE Regulation, Inc. is a not-for-profit corporation dedicated to strengthening market integrity and investor protection. Enforcement cases are often instigated by referrals from the SEC.