What is Insider Trading?
Insider trading is the practice of buying/selling stocks using insider information not available to the general public. Stock trading in this way is abusive of information and unfair to other investors, and is punishable by law. To help protect investors, federal laws like the Security Exchange Act of 1934 regulate the accountability of violators.
Insider trading can be punishable by a fine or up to 20 years in prison. The two main ways to enforce this are for the victim to sue the violator, or to report it to the Security Exchange Commission, where they can pick up the case. This leads to civil suits, where the violator may be ordered to return their profits with added fines and jail time.
The Charges
Joe Lewis, indicted by the Southern District of New York, was charged for using his corporate boardroom positions to provide inside information to close friends and partners, allowing them to make large profits between 2019 to 2021. Discussions and swappings of confidential information allegedly took place in Lewis’ superyacht, Aviva, where guests such as athletes, executives, and family and friends were invited.
Allegedly, Lewis loaned money to his pilots and encouraged them to trade a biotech company’s stocks before a public announcement was made about trial results. The indictment also alleges that he provided information as soon as possible to his personal assistant and girlfriend to trade.
US/UK Relations
Under a treaty signed in 2003, the U.S. and United Kingdom have a bilateral extradition relationship that gives each country the ability to extradite offenders of serious crimes. This means that arrested parties must be surrendered to the foreign country upon request, as treaty terms are met and no exceptions occur. An extradition request is sent by the “requesting state” and acted upon by the “requested state.” Following this, a long process is undergone to evaluate and carry on the extradition.
The United States has extradition treaties with more than 100 countries, and has the ability to accept fugitives from these states. Each treaty includes terms for extraditable offenses, as well as exceptions to these rules. Examples of such exceptions include political offenses and sometimes offenses by the requested nationality.
Lewis and the Case
Lewis’ lawyer, David M. Zornow has not admitted to these charges and will counsel Lewis in court. Lewis has a net worth of $6.1 billion, and founded the company Travistock Group, which invests in companies all over the world. He was a majority shareholder of Tottenham for over 20 years until a family trust took majority control last year.
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