Robert[1] Foster Winans (born August 5, 1948) is a former columnist for The Wall Street Journal who co-wrote the[2] "Heard on the Street" column from 1982 to 1984 and was convicted of insider trading and mail fraud. He was indicted by then-U.S. AttorneyRudolph Giuliani and convicted in 1985 of violating Federal law by leaking advance word of the contents of his columns to a stockbroker, Peter N. Brant,[3] at Kidder, Peabody & Co., an old-line brokerage firm. Brant was decades later labeled a recidivist[4] by the U.S. Securities and Exchange Commission. Winans' conviction for violating securities law was affirmed by the U.S. Supreme Court in 1987 as Carpenter v. United States (1987) by a rare 4–4 deadlocked vote.[5] However, the Supreme Court unanimously affirmed his convictions for committing federal mail and wire fraud. He served nine months in federal prison.
Winans admitted his participation in the scheme and to earning $31,000 from it, but pleaded not guilty, arguing that his behavior was unethical but not criminal. Winans was found guilty and sentenced to 18 months in prison, later reduced to a year and a day. In a 2006 speech on the importance of ethical journalism as a necessary aid to help the SEC combat stock market fraud, Christopher Cox, chairman of the SEC, stated that "Winans, who was found guilty of 59 separate counts of securities fraud, is by no means the only journalist who has stood accused of law breaking, and who brought disgrace to (journalism)."[6]
Both the securities industry and the First Amendment lobby criticized the prosecution as overstepping the bounds of the securities laws, and filed amicus briefs during the appeals process.[citation needed] Winans's case included two co-defendants and reached the U.S. Supreme Court in 1987 as Carpenter v. United States, where the conviction was affirmed by a rare 4–4 deadlock.[5] The missing member was due to the retirement of Justice Lewis F. Powell Jr. The Supreme Court unanimously affirmed his convictions for committing federal mail and wire fraud, however. The case is still taught in law and journalism schools.[7] Winans's book about the case, Trading Secrets, was published in 1986 by St. Martin's Press in the U.S. and under the title Wall Street in France.[8] It was excerpted in Esquire magazine and was a Book-of-the-Month Club Selection.
Later life
Winans has ghosted, co-written, and/or independently produced more than 30 books in the two decades since serving nine months in Federal prison in 1988. In 1999, he founded a nonprofit writers resource center in Bucks County, Pennsylvania, and ran it for six years before returning to writing and producing books.
Between 2003 and 2005, with the indictment and conviction of Martha Stewart in connection with suspicious trades in Imclone stock, Winans frequently appeared on television and radio programs discussing the issue of insider trading, Stewart's likely fate, and business ethics. He has appeared before law-enforcement and academic audiences speaking about his experiences and the psychology behind white-collar crime.
Winans once asserted, "The only reason to invest in the market is because you think you know something others don't."[9] He is now the President and Chief Creative Officer of Winans Kuenstler Publishing, which claims to be involved in "Ghost Writing, Production, Distribution, and Marketing of Books That Make a Difference by Authors with Fresh Ideas."[10]
Insider trading is the trading of a public company's stock or other securities based on material, nonpublic information about the company. In various countries, some kinds of trading based on insider information are illegal. This is because it is seen as unfair to other investors who do not have access to the information, as the investor with insider information could potentially make larger profits than a typical investor could make. The rules governing insider trading are complex and vary significantly from country to country. The extent of enforcement also varies from one country to another. The definition of insider in one jurisdiction can be broad and may cover not only insiders themselves but also any persons related to them, such as brokers, associates, and even family members. A person who becomes aware of non-public information and trades on that basis may be guilty of a crime.
Jeffrey Keith Skilling is an American businessman and convicted felon who was the CEO of Enron Corporation during the Enron scandal. In 2006, he was convicted of federal felony charges relating to Enron's collapse and eventually sentenced to 24 years in prison. The US Supreme Court heard arguments in the appeal of the case March 1, 2010. On June 24, 2010, the Supreme Court vacated part of Skilling's conviction and transferred the case back to the lower court for resentencing.
The U.S. attorney for the District of New Jersey is the chief federal law enforcement officer in New Jersey. On December 16, 2021, Philip R. Sellinger was sworn in as U.S. Attorney. The U.S. District Court for the District of New Jersey has jurisdiction over all cases prosecuted by the U.S. attorney.
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SEC Rule 10b-5, codified at 17 CFR 240.10b-5, is one of the most important rules targeting securities fraud promulgated by the U.S. Securities and Exchange Commission, pursuant to its authority granted under § 10(b) of the Securities Exchange Act of 1934. The rule prohibits any act or omission resulting in fraud or deceit in connection with the purchase or sale of any security. The issue of insider trading is given further definition in SEC Rule 10b5-1.
Front running, also known as tailgating, is the practice of entering into an equity (stock) trade, option, futures contract, derivative, or security-based swap to capitalize on advance, nonpublic knowledge of a large ("block") pending transaction that will influence the price of the underlying security. In essence, it means the practice of engaging in a personal or proprietary securities transaction in advance of a transaction in the same security for a client's account. Front running is considered a form of market manipulation in many markets. Cases typically involve individual brokers or brokerage firms trading stock in and out of undisclosed, unmonitored accounts of relatives or confederates. Institutional and individual investors may also commit a front running violation when they are privy to inside information. A front running firm either buys for its own account before filling customer buy orders that drive up the price, or sells for its own account before filling customer sell orders that drive down the price. Front running is prohibited since the front-runner profits come from nonpublic information, at the expense of its own customers, the block trade, or the public market.
Securities regulation in the United States is the field of U.S. law that covers transactions and other dealings with securities. The term is usually understood to include both federal and state-level regulation by governmental regulatory agencies, but sometimes may also encompass listing requirements of exchanges like the New York Stock Exchange and rules of self-regulatory organizations like the Financial Industry Regulatory Authority (FINRA).
Equity Funding Corporation of America was a Los Angeles-based U.S. financial conglomerate that marketed a package of mutual funds and life insurance to private individuals in the 1960s and 70s. It collapsed in scandal in 1973 after former employee Ronald Secrist and securities analyst Ray Dirks blew the whistle on massive accounting fraud, including a computer system dedicated exclusively to creating and maintaining fictitious insurance policies. Investigation found that from 1964 onward, as many as 100 company employees had engaged in organized deception of investors, auditors, reinsurers and regulatory authorities.
Jed Saul Rakoff is a senior United States district judge of the United States District Court for the Southern District of New York.
The trial of Kenneth Lay, former chairman and CEO of Enron, and Jeffrey Skilling, former CEO and COO, was presided over by federal district court Judge Sim Lake in 2006 in response to the Enron scandal.
Rajakumaran Rajaratnam is a Sri Lankan-American former hedge fund manager and founder of the Galleon Group, a New York-based hedge fund management firm.
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Honest services fraud is a crime defined in 18 U.S.C. § 1346, added by the United States Congress in 1988, which states "For the purposes of this chapter, the term scheme or artifice to defraud includes a scheme or artifice to deprive another of the intangible right of honest services."
Robert M. Freeman is an American stock broker and convicted felon who was a Goldman, Sachs & Co. partner. Freeman admitted to trading on inside information and pled guilty to mail fraud in 1989.
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Anthony R. Chiasson is an American hedge fund manager and co-founder of Level Global Investors LP, a Greenwich, Connecticut-based hedge fund management firm. Level Global was launched in 2003 with about $500 million in assets under management, and grew to $4.2 billion in assets and 75 employees before closing in early 2011.
Salman v. United States, 580 U.S. ___ (2016), was a United States Supreme Court case in which the Court held that gifts of confidential information without any compensation to relatives for the purposes of insider trading are a violation of securities laws. The Court relied on its decision in Dirks v. Securities and Exchange Commission, 463 U.S. 646 (1983), which held that "that a tippee is exposed to liability for trading on inside information only if the tippee participates in a breach of the tipper's fiduciary duty."
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Michael A. Kimelman is an American entrepreneur, former trader, author, business coach, financial consultant and motivational speaker.
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