JPMorgan Securities Investigated In Japan SESC Probe

J.P. Morgan Chase & Co. faces a new regulatory headache, as Japan's securities watchdog is probing the company for possibly leaking insider information, a person familiar with the matter said.

J.P. Morgan was a lead underwriter for Nippon Sheet Glass Co. in 2010 when the glass maker issued new shares, and the company's stock dropped sharply in the days leading up the announcement. Japan's Securities and Exchange Surveillance Commission Tuesday announced it was seeking to fine an asset management company called Asuka Asset Management Ltd. for short-selling shares based on illegally obtained information in advance of the offering from an underwriter.

While Asuka gained Y60.5 million, or about $760,000, from the insider trading, the watchdog only recommended a fine of Y130,000, or about $1,600, because of the small amount of fees earned from its clients on the trades. Read more >>

Almost Half of Insider Trading Defendants Avoid Prison

Image via WikipediaAlmost half of the 43 defendants who were sentenced in Manhattan federal court in the past eight years for insider trading avoided a prison term, with many never seeing the inside of a jail cell because they cooperated with prosecutors.

Nineteen who were sentenced since 2003, or 44 percent, weren’t incarcerated, an analysis of court cases by Bloomberg showed. Of the remainder, the average defendant got a prison term of 18.4 months. The greater the profit made on illegal trades, the longer the sentence. The longest term was 10 years. Danielle Chiesi, who pleaded guilty yesterday for her role in the Galleon Group LLC hedge fund insider-trading scandal, faces between 37 and 46 months in prison.

Since 2009, U.S. Attorney Preet Bharara in Manhattan has stepped up insider-trading prosecutions, charging more than 30 people in three overlapping rings. Of the three defendants sentenced so far in the Galleon ring, the average sentence has been 17 months. The nationwide investigation has implicated hedge funds, technology companies and so-called expert- networking firms. Read more...