Table of Contents

Research Handbook on International Financial Crime

Research Handbook on International Financial Crime

Research Handbooks in Financial Law series

Edited by Barry Rider

A significant proportion of serious crime is economically motivated. Almost all financial crimes will be either motivated by greed, or the desire to cover up misconduct. This Handbook addresses financial crimes such as fraud, corruption and money laundering, and highlights both the risks presented by these crimes, as well as their impact on the economy. The contributors cover the practical issues on the topic on a transnational level, both in terms of the crimes and the steps taken to control them. They place an emphasis on the prevention, disruption and control of financial crime. They discuss, in eight parts, the nature and characteristics of economic and financial crime, the enterprise of crime, business crime, the financial sector at risk, fraud, corruption, the proceeds of financial and economic crime, and enforcement and control.

Chapter 21: A new era of sentencing insider crimes

Rita Cheung

Subjects: economics and finance, financial economics and regulation, law - academic, corruption and economic crime, finance and banking law


Insider tradinghas been a criminal offence in the US and England. The offence in both countries is based on unlawful trading in securities by an insider on the basis of confidential inside information. Insider trading occurs when an insider trades on the basis of confidential price sensitive information for a financial gain. The gain could take the form of ‘profit made’ or ‘loss avoided’. While the policy justifications for regulating insider trading have been much disputed, insider trading is regarded essentially as a sophisticated fraud. It is a form of market abuse that erodes public confidence in the integrity, fairness and efficiency of the financial markets and damages the interests of market participants. In recent years, both countries have taken steps to reform their sentencing guidelines for insider trading. In the US this has taken the form of amending the insider trading guideline as contained in section 2B1.4 of the Federal Sentencing Guidelines in response to the recommendations made by the Dodd-Frank Wall Street Reform and Consumer Protection Act 2010; while in England this has taken the form of the introduction of the Court of Appeal guideline judgments and new sentencing guidelines under the Coroners and Justice Act 2009. A significant feature of the reforms in the two countries is that both called for the development of an effective sentencing framework that would promote greater consistency and proportionality in sentencing. The countries, however, adopt different approaches to sentencing insider crimes.

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