4 ms·

Can you point to an example of parallel construction being (successfully) used as a defense in an insider trading case? If the prosecution can prove that you ha

Can you point to an example of parallel construction being (successfully) used as a defense in an insider trading case? If the prosecution can prove that you had insider knowledge, it seems like the availability of non-insider knowledge isn't relevant because literally everyone has access to non-insider knowledge (that's the definition of what makes insider knowledge--that not everyone has access to it). I've heard of parallel construction being used to prosecute in criminal cases with illegally-collected evidence, but never as a defense. That said, I'm not a lawyer and I don't follow case law in that much detail, so I wouldn't be surprised at all if this has happened.

pfranz 9y ago
From the little I've seen about the law, very rarely are things air-tight. For jurors in all trials, they often talk to them about the "CSI effect" where the average person assumes to convict there's tidy, irrefutable forensic evidence. I can see how parallel construction allows someone to lean on that and help blow off any possible exposure to insider knowledge to avoid the burden proof necessary to convict. White collar crimes have always been notoriously hard to prove.
refurb 9y ago
I would guess the ones who are smart enough to "parallel construct" are the ones that don't get caught? The SEC looks at trading history when investigating insider trading. Never bought stock X, but 3 days before a merger you bought a ton of out-of-the-money call options? You bet the SEC will be talking to you. Have a history of investing in a sector and make a not-out-of-the-ordinary large purchase of stock 3 days before the merger? The SEC might just choose to go after the bigger fish.
tankenmate 9y ago
The point is you'd never have such a case, the prosecutors would never bring a case that was so easy for the defence to torpedo.

pfranz 9y ago

From the little I've seen about the law, very rarely are things air-tight. For jurors in all trials, they often talk to them about the "CSI effect" where the average person assumes to convict there's tidy, irrefutable forensic evidence. I can see how parallel construction allows someone to lean on that and help blow off any possible exposure to insider knowledge to avoid the burden proof necessary to convict. White collar crimes have always been notoriously hard to prove.

refurb 9y ago

I would guess the ones who are smart enough to "parallel construct" are the ones that don't get caught? The SEC looks at trading history when investigating insider trading. Never bought stock X, but 3 days before a merger you bought a ton of out-of-the-money call options? You bet the SEC will be talking to you. Have a history of investing in a sector and make a not-out-of-the-ordinary large purchase of stock 3 days before the merger? The SEC might just choose to go after the bigger fish.

tankenmate 9y ago

The point is you'd never have such a case, the prosecutors would never bring a case that was so easy for the defence to torpedo.