(a) Base Offense Level: 8
(b) Specific Offense Characteristics
(1) If the gain resulting from the offense exceeded $6,500, increase by the number of levels from the table in §2B1.1 (Theft, Property Destruction, and Fraud) corresponding to that amount.
(2) If the offense involved an organized scheme to engage in insider trading and the offense level determined above is less than level
14, increase to level
14.
Commentary
Statutory Provisions:
15 U.S.C. § 78j and
17 C.F.R. § 240.10b-5. For additional statutory provision(s),
see Appendix A (Statutory Index).
Application Notes:
1.
Application of Subsection (b)(2).–For purposes of subsection (b)(2), an "organized scheme to engage in insider trading" means a scheme to engage in insider trading that involves considered, calculated, systematic, or repeated efforts to obtain and trade on inside information, as distinguished from fortuitous or opportunistic instances of insider trading.
The following is a non-exhaustive list of factors that the court may consider in determining whether the offense involved an organized scheme to engage in insider trading:
(A) the number of transactions;
(B) the dollar value of the transactions;
(C) the number of securities involved;
(D) the duration of the offense;
(E) the number of participants in the scheme (although such a scheme may exist even in the absence of more than one participant);
(F) the efforts undertaken to obtain material, nonpublic information;
(G) the number of instances in which material, nonpublic information was obtained; and
(H) the efforts undertaken to conceal the offense.
2.
Application of §3B1.3.—Section 3B1.3 (Abuse of Position of Trust or Use of Special Skill) should be applied if the defendant occupied and abused a position of special trust. Examples might include a corporate president or an attorney who misused information regarding a planned but unannounced takeover attempt. It typically would not apply to an ordinary "tippee".
Furthermore, §3B1.3 should be applied if the defendant's employment in a position that involved regular participation or professional assistance in creating, issuing, buying, selling, or trading securities or commodities was used to facilitate significantly the commission or concealment of the offense. It would apply, for example, to a hedge fund professional who regularly participates in securities transactions or to a lawyer who regularly provides professional assistance in securities transactions, if the defendant's employment in such a position was used to facilitate significantly the commission or concealment of the offense. It ordinarily would not apply to a position such as a clerical worker in an investment firm, because such a position ordinarily does not involve special skill. See §3B1.3, comment. (n. 4).
Background: This guideline applies to certain violations of Rule 10b-5 that are commonly referred to as "insider trading". Insider trading is treated essentially as a sophisticated fraud. Because the victims and their losses are difficult if not impossible to identify, the gain,
i.e., the total increase in value realized through trading in securities by the defendant and persons acting in concert with the defendant or to whom the defendant provided inside information, is employed instead of the victims' losses.
Certain other offenses, e.g., 7 U.S.C. § 13(e), that involve misuse of inside information for personal gain also appropriately may be covered by this guideline.
Subsection (b)(2) implements the directive to the Commission in section 1079A(a)(1)(A) of Public Law 111–203.
Historical Note: Effective November 1, 2001 (amendment 617). Amended effective November 1, 2010 (amendment 746); November 1, 2012 (amendment 761); November 1, 2015 (amendment 791).
Notes of Decisions
United States v. Kluger, 722 F.3d 549 (3rd Cir. 2013).
· cites it 11× “4, the District Court attributed all of the scheme’s monetary gain to Kluger even though his share of the profits was far less than Bauer’s share when Bauer was trading on Kluger’s information.”
United States v. Michael Alan Mooney, 425 F.3d 1093 (8th Cir. 2005).
· cites it 11× “46 under U.S.S.G. § 2B1.4. With a total offense level of 21 and a criminal history score of I, Mooney’s sentencing range was 37 — 46 months.”
United States v. Nacchio, 573 F.3d 1062 (10th Cir. 2009).
· cites it 2× “3d at 1099 (citing U.S.S.G. § 2B1.4 cmt. background (2002)).”
United States v. Wang, 981 F.3d 39 (1st Cir. 2020).
· cites it 3× “U.S.S.G. § 2B1.4 applies to insider trading offenses.”
United States v. Kim Ricard, 922 F.3d 639 (5th Cir. 2019).
“The initial PSR also recommended a ten-level enhancement, pursuant to U.S.S.G. § 2B1.4(b)(1)(B), because the kickbacks totaled $ 249,300.”
United States v. Goffer, 721 F.3d 113 (2d Cir. 2013).
“See U.S.S.G. §§ 2B1.4(b)(l), 2Bl.l(b)(l)(K). Drimal asserted that his gains were between $2.”
United States v. Riley, 638 F. App'x 56 (2d Cir. 2016).
· cites it 2× “First, we discern no clear error in the district court’s consideration of trading by Artis Capital Management, LP—tippee Teeple’s hedge-fund employer—in making the U.S.S.G. § 2B1.4 calculation of the “gain” resulting from Riley’s offense.”
United States v. Michael Alan Mooney, 401 F.3d 940 (8th Cir. 2005).
“46 under U.S.S.G. § 2B1.4. With a total offense level of 21 and a criminal history score of I, Mooney’s sentencing range was 37 — 46 months.”
United States v. Gupta, 904 F. Supp. 2d 349 (S.D.N.Y. 2012).
“” U.S.S.G. § 2B1.4 cmt. As Judge Holwell pointed out in connection with Mr.”
United States v. Martoma, 48 F. Supp. 3d 555 (S.D.N.Y. 2014).
· cites it 17× “This opinion addresses Marto-ma’s objections to the calculation of gain under U.S.S.G. §§ 2B1.4 and 2Bl.l(b) as set forth in the U.”
— U.S.S.G. §2B1.4(a) — 1 case
United States v. Martoma, 48 F. Supp. 3d 555 (S.D.N.Y. 2014).
“This opinion addresses Marto-ma’s objections to the calculation of gain under U.S.S.G. §§ 2B1.4 and 2Bl.l(b) as set forth in the U.”
— U.S.S.G. §2B1.4(b) — 2 cases
United States v. Wang, 981 F.3d 39 (1st Cir. 2020).
“U.S.S.G. § 2B1.4 applies to insider trading offenses.”
United States v. Martoma, 48 F. Supp. 3d 555 (S.D.N.Y. 2014).
“This opinion addresses Marto-ma’s objections to the calculation of gain under U.S.S.G. §§ 2B1.4 and 2Bl.l(b) as set forth in the U.”
— U.S.S.G. §2B1.4(b)(1) — 4 cases
— U.S.S.G. §2B1.4(b)(1)(B) — 1 case
United States v. Kim Ricard, 922 F.3d 639 (5th Cir. 2019).
“The initial PSR also recommended a ten-level enhancement, pursuant to U.S.S.G. § 2B1.4(b)(1)(B), because the kickbacks totaled $ 249,300.”
— U.S.S.G. §2B1.4(b)(l) — 2 cases
United States v. Goffer, 721 F.3d 113 (2d Cir. 2013).
“See U.S.S.G. §§ 2B1.4(b)(l), 2Bl.l(b)(l)(K). Drimal asserted that his gains were between $2.”
United States v. Martoma, 48 F. Supp. 3d 555 (S.D.N.Y. 2014).
“This opinion addresses Marto-ma’s objections to the calculation of gain under U.S.S.G. §§ 2B1.4 and 2Bl.l(b) as set forth in the U.”
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