While hardly a long shot, we predicted this result way back in March:
Mr. Dowd and his cast of subordinates (when you represent a billionaire facing prison you can’t possibly bill enough hours) will try mightily to argue the technicalities of what constitutes criminal insider trading — but my money is on the government and its young team of prosecutors.
Raj was just a bit too greedy, a bit too brazen, and in the end a bit too careless. While his was a clear case of insider trading (as noted by Juror Lauren, “there was just a lot of evidence”), many who walk the rarified halls of Wall Street are behaving in ways that are not too dissimilar. Where precisely is the line between aggressive fact gathering and illegal insider trading? It’s difficult to determine because in many cases it is a matter of degree not substance. The advent of social networking tools will only complicate matters.
As a former Federal Prosecutor, I can tell you though — deterrence matters. Long jail sentences have a chilling effect. The threat of jail will change behavior. Prosecutors need to keep at it. Stay on the front pages, bring more cases and demonstrate that while there are shades of gray around corporate conduct — there is a line that if crossed means you too may be on your way to jail; and when that line is blurry you best stay well to the
legal side.