Policing Markets Around the World

While the U.S. Securities and Exchange Commission polices markets in America, regulators around the globe have been actively investigating and bringing civil and criminal securities fraud enforcement cases.


• The much discussed insider trading cases of former investment banker Andrew Rankin appear to be coming to an end. Mr. Rankin faced civil and criminal charges arising out of claims that traded and tipped his friend Daniel Duic, who also traded on inside information over a period of years. Last year, Mr. Rankin was acquitted of insider trading charges and had his conviction for tipping overturned on appeal. During that time, Mr. Duic settled claims that he traded based on inside information obtained from Mr. Rankin. As a second criminal trial began, Mr. Rankin reached a tentative settlement on the civil enforcement charges, contrary to the usual pattern where criminal cases are usually settled first.

Vincent Lacroix was sentenced to 12 years less one day and fined $225,000 by a Quebec judge for running a boiler room operation. Courtroom spectators burst into applause following the sentence. The case follows on the heals of a study which found that more than one million Canadians had lost money to some kind of investment fraud.


• The Securities and Exchange Commission reminded all operators that insider dealing is a criminal offense in the capital markets and urged all dealers to operate within the limits of the regulations. This announcement followed the commencement of an inquiry into the trading in the shares of African Petroleum Plc, Big Treat Plc, Afroi Plc, First Aluminum Plc, Capital Oil Plc and IPWA Plc. There were allegations of price manipulation and other improper practices.


The Financial Services Agency plans to double fines for insider trading and other illegal securities-related activities. Currently, fines on profits from insider trading are based on the difference in the stock price on the day following the company announcement and the day the shares were purchased.

The Securities and Exchange Surveillance Commission plans to recommend to the Financial Services Agency that fines be levied on three NHK employees for insider trading. The fines are expected to range from 60,000 yen to 200,000 yen per person.


The Australian Securities Exchange launched a special investigation into more than 900 trades by directors in their companies made since the end of the year. This inquiry followed a study by corporate governance experts which suggests that directors are trading in the shares of their companies prior to important announcements.

• Another report claims that insider trading is so rampant in the Australian stock market that it is weakening the reputation of the local bourse. Some executives have been quoted as saying that insider trading has become a part of the system.