Financial reform and the implementing Dodd-Frank continue to be key topics for market regulators. The SEC, CFTC and others are busy writing rules to implement the Act. Many on Capital Hill are studying ways to limits or repeal portions of the landmark legislation, particularly in view of the recent mid-term election results.

Despite this focus, a critical concern for regulators here and around the globe continues to be insider trading. In the Southern District of New York more guilty pleas were unsealed on Friday in the seemingly ever-expanding Galleon insider trading case (here). The plea agreements are with Tom Hardin and Franz Tudor. Mr. Hardin is the former Lanexa Global Management trader referred to in court papers as Tipper X, according to a Bloomberg report. He pleaded guilty last December and is cooperating with the government. Mr. Tudor is a former Galleon trader who pleaded guilty last month. The government now has fourteen guilty pleas in the Galleon related insider trading cases. The primary cases mired in discovery disputes, but are still moving toward trial.

The SEC also filed charges against Messrs. Hardin and Tudor. In an action related to Galleon, the complaint against Mr. Hardin alleges three instances in which he traded on inside he obtained from Roomy Khan (here) before passing it on to others. In one, Ms. Khan obtained information about the takeover of Hilton by The Blackstone Group from a Moody’s rating agency analyst. In another, she furnished Mr. Hardin with inside information about Google’s second quarter 2007 earnings. The information came from a consulting firm that worked for the company. Mr. Hardin also received inside information from Ms. Khan concerning the acquisition of Kronos by Hellman & Friedman. SEC v. Hardin, Civil Action No. 10-cv-8600 (S.D.N.Y. Filed Nov. 12, 2010).

The SEC also filed two new cases related to SEC v. Cutillo (previously discussed here). One is against Mr. Hardin and Lanexa, while the other names Mr. Tudor as a defendant. The complaint against Mr. Hardin and the fund claims they traded on inside information about the acquisition of 3Com. Mr. Hardin is alleged to have obtained the information through a chain of tips which began at the law firm of Ropes & Gray with two attorneys, Messrs. Santarias and Cutillo, was passed it to another attorney, Zvi Goffer who was a proprietary trader at Schottenfeld, who then passed it to another trader at the firm, Gautham Shankar. SEC v. Lanexa Management LLC, Civil Action No. 10-cv-8599 (S.D.N.Y. Filed Nov. 12, 2010).

Similarly, the complaint against Mr. Tudor claims that he received inside information from Mr. Goffer about the proposed acquisition of Axcan and traded. SEC v Tudor, Civil Action No. 10-cv-8598 (S.D.N.Y. Filed Nov. 12, 2010). These cases are in litigation.

DOJ and the SEC are not the only regulators focused on insider trading. In the UK the FSA has been prosecuting a series of insider trading actions. Recently, the regulator executed warrants in the UK and Germany related to an insider dealing case (here). The FSA also announced a new initiative which will require firms to record cell phone calls of certain employees as part of its on-going crack down on insider dealing.

Japan’s financial regulator is also considering broadening its insider trading prohibitions. The regulator is, according to a Bloomberg report, considering broadening those restrictions to include persons with second and third hand information. The new rules would supplement existing regulations which apply to company executives, employees and underwriters. Presumably the regulations under consideration would reach situations like those detailed in the SEC actions announced on Friday.