Preet Bharara ’93 Taps Two CLS Faculty Members for Insider Trading Task Force
Preet Bharara ’93 formed a blue-ribbon task force of former regulators, prosecutors, judges, academics, and defense lawyers to develop proposals to update insider trading laws, which have not been systematically addressed for decades.
Bharara, former U.S. Attorney for the Southern District of New York, named two members of the Columbia Law faculty to serve on the distinguished panel: John C. Coffee, Jr., Adolf A. Berle Professor of Law, and Judge Jed S. Rakoff, of the U.S. Southern District of New York, who has served as an adjunct professor at the Law School for 30 years. Coffee and Rakoff co-teach a popular class, Black Letter Law/White Collar Crime.
Bharara jointly proposed the task force with Securities and Exchange Commissioner Robert J. Jackson Jr. in an Oct. 9 New York Times op-ed. “America’s insider trading laws are hopelessly out of date,” the authors wrote. “As a result, fraudsters have evaded law enforcement scrutiny, and honest market participants are sometimes confused about the rules of the road.”
Chaired by Bharara, the task force will develop proposed insider trading rules for 21st century markets; it will present a report to the U.S. Securities and Exchange Commission and Congress about ways to clarify and update the country’s insider trading laws. The task force will initially focus on analyzing the “personal benefit” test and fiduciary concepts as applied to insider trading, particularly as it involves tipping chains, as well as hacking-related insider trading cyber threats by the current securities laws.
Coffee, a world-renowned expert on securities law who directs the Law School’s Center on Corporate Governance, stressed the need for updated insider trading laws. "With each passing year, the law of insider trading becomes more complex, and the prospect of intercircuit divergences increases. Both sides—prosecutors and defense counsel—would be well served by clearer standards," he said. "Even if a legislative solution is not likely in the immediate term, the criminal justice system would be well served if this effort could produce a legislative package, reflecting balanced standards, for future adoption."
The membership of the task force includes:
- Preet Bharara (chair), former U.S. Attorney for the Southern District of New York
- Professor John C. Coffee, Jr., Adolf A. Berle Professor of Law, Columbia Law School
- Katherine R. Goldstein, former Chief of the Southern District of New York’s Securities Fraud Task Force
- The Hon. Joseph A. Grundfest, Stanford Law Professor and former SEC Commissioner
- Melinda Haag, former U.S. Attorney for the Northern District of California
- Joon H. Kim (vice chair), former acting U.S. Attorney for the Southern District of New York
- Joan E. McKown, former general counsel of the SEC’s Division of Enforcement
- The Hon. Jed S. Rakoff, U.S. District Judge for the Southern District of New York, adjunct professor, Columbia Law School
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Published October 23, 2018