Political Intelligence Insider Trading: A Dialogue

On Thursday, October 15, 2020, Senator Elizabeth Warren called for investigations into an October 14 report by The New York Times, that, in February, top U.S. officials privately told the board of the Hoover Institution that they could predict neither the magnitude nor gravity of a coronavirus outbreak, despite public statements by the Administration that the epidemic was under control. According to The New York Times article, an attendee documented the officials’ skepticism in a memorandum and that information spread to certain hedge funds, which might have traded based on the report. In a letter to the SEC and the CFTC, Senator Warren said the reported incident “appears to be a textbook case of insider trading.” But is it? Insider trading cases implicating government officials create headlines and often involve the appearance, and sometimes the reality, of greed and corruption. But they also can present challenging legal and factual issues for SEC and criminal prosecutors.

This recorded discussion explores the issues implicated by The New York Times article (without expressing a view as to whether the facts described are accurate) among Sidley Securities Enforcement and Regulatory group partners Nader Salehi, Hardy Callcott, Stephen Cohen, and Barry Rashkover and White Collar partner Joan Loughnane.