A violator of insider trading regulations may face what type of civil penalty?

A violator of insider trading regulations may face what type of civil penalty?

• A. Up to twice the profit gained
• B. Three times the profit gained or loss avoided
• C. A fixed fine of $50,000
• D. Los of license and trading privileges

Answer: (B)

A violator of insider trading regulations may face civil penalties that include monetary fines equivalent to three times the profit gained or loss avoided from the illegal trades. This penalty structure is designed to deter individuals from engaging in insider trading by imposing significant financial consequences that are proportionate to the gains made or losses avoided through illicit actions. The rationale behind the triple damages is to underscore the seriousness of insider trading and to deter future violations. By making the potential consequences substantial, regulators aim to protect the integrity of the securities markets and maintain investor confidence. Other civil penalties may include fines or disciplinary actions, but the specific provision of three times the profit or loss reflects the regulatory intent to hold violators accountable in a manner that directly correlates to their monetary advantage gained through unlawful conduct.

A violator of insider trading regulations may face civil penalties that include monetary fines equivalent to three times the profit gained or loss avoided from the illegal trades. This penalty structure is designed to deter individuals from engaging in insider trading by imposing significant financial consequences that are proportionate to the gains made or losses avoided through illicit actions.

The rationale behind the triple damages is to underscore the seriousness of insider trading and to deter future violations. By making the potential consequences substantial, regulators aim to protect the integrity of the securities markets and maintain investor confidence.

Other civil penalties may include fines or disciplinary actions, but the specific provision of three times the profit or loss reflects the regulatory intent to hold violators accountable in a manner that directly correlates to their monetary advantage gained through unlawful conduct.