SEC Bringing More Insider Trading Cases

Practically every week we learn of another political insider who made a fortune allegedly trading on inside information,¹ an insider trader who was pardoned,² or of a scheme by the President to sell early access to inside information for a subscription fee of $100,000 per month.³ We also know that the ability of the Securities and Exchange Commission to police any insider trading would seem to be severely impaired by the mass exodus of personnel, including senior management, from the agency since January 2025.⁴

But it turns out that the  chances of being investigated and prosecuted for insider trading today have actually increased in the last 18 months compared to the last few decades. SEC Chairman Paul Atkins has advanced a “back to basics” approach that prioritizes core market-integrity violations.⁵ One of the most prominent of those violations is insider trading. SEC Enforcement Director David Woodcock, who took office in May 2026, has also emphasized that insider trading will be an important target of investigations.⁶

Moreover, both Chairman Atkins and Director Woodcock have stressed that the SEC will continue to encourage the U.S. Department of Justice (USDOJ) to simultaneously investigate insider trading cases alongside the SEC (called “parallel prosecutions”). Some commentators predicted that parallel prosecutions would decline because USDOJ is bringing far fewer criminal insider trading cases, but that has not been the case. While a criminal prosecution can result in prison and fines, an SEC prosecution can only result in injunctions, administrative orders and bars, and the recovery of the insider trading profits (or avoided losses) and penalties but not prison.

In civil and criminal federal securities violation cases, the line between a technical legal violation and a crime with a clear victim simply does not matter. Insider trading prosecutions are based on the injury to the integrity of the marketplace, a theory that does not require any identifiable victim. But, an insider trading prosecution requires a breach of a fiduciary duty not to use confidential information for personal gain. People with these fiduciary duties include employees, consultants to companies, and trusted family members and friends who know confidential information. For individuals facing an insider trading investigation , understanding this is the first step in reckoning with the possible consequences.

SIGNIFICANT INCREASE IN SEC INSIDER TRADING CASES

In the first year of this second Trump Administration, the SEC filed nearly double the number of insider trader cases as the first year of the Biden Administration. Although the current (second) year is not quite over, the SEC has filed nearly as many cases as last year. This is not accounting for the September (end of fiscal year) filed cases (typically the SEC brings an increased number of cases during September as the fiscal year ends on September 30). Below are quick summaries of SEC insider trading cases filed in 2026 to date:

• In SEC v. Hong (a/k/a John) Wang et al. (D. Mass.) (filed January 15, 2026), an outside consultant was charged with insider trading resulting in approximately $500,000 in illicit profits. A parallel criminal action was filed by USDOJ;
• In SEC v. Brian J. Suthoff (D. Mass.) (filed January 26, 2026), an outsider settled with the SEC for allegedly using nonpublic information obtained from a former senior employee to avoid nearly $20,000 in losses. The outsider defendant agreed to pay disgorgement of the avoided losses plus prejudgment interest and a civil penalty in the same amount as disgorgement, the imposition of a permanent injunction under Section 10(b) and Rule 10b-5 and a five-year officer-and-director bar;
• In SEC v. Rakesh Ahuja (S.D.N.Y) (filed April 20, 2026), a former employee of an investment advisory firm which advised funds specializing in biopharmaceutical and biotechnology investments settled with the SEC. The defendant allegedly made $65,000 in illicit profits based on nonpublic clinical trial information and agreed to pay that amount in disgorgement and the same amount in civil penalties, plus $12,000 in prejudgment interest;
• In In re Nipun Kumar Jami (filed May 22, 2026), an individual agreed to an administrative consent order for obtaining nonpublic information regarding a pending acquisition from the defendant’s spouse who was employee of the acquiring firm. The defendant agreed to a cease-and-desist order, and to disgorgement of $1.3 million, but the civil penalty was limited to $650,000 (half the disgorgement amount) because the defendant self-reported and cooperated with SEC;
• In SEC v. Jai Sondhi (N.D. Tex.) (filed April 28, 2026), a former employee settled with the SEC for trading on nonpublic information about their company entering into a major contract, generating approximately $55,000 in illicit gains. The former employee agreed to disgorgement of $55,000, a civil penalty of $55,000, plus prejudgment interest of $16,000, in addition to a permanent injunction;
• In SEC v. Nourafchan, et al. (D. Mass.) (filed May 6, 2026), 21 individuals including several lawyers were charged with a decade-long insider trading scheme using potential mergers and acquisitions information they allegedly obtained from law firm clients that netted millions of dollars. Parallel criminal charges were filed against all defendants;
• In SEC v. Oskar Elmgart, et al. (D.N.J.) (filed May 18, 2026), two individuals who obtained information from a family member prior to announcement of commercial agreement, settled with the SEC. Combined, the defendants agreed to pay approximately $100,000 in disgorgement, $100,000 in civil penalties, prejudgment interest of approximately $9000, and to permanent injunctions;
• In SEC v. JianQing Li  (S.D.N.Y.) (filed June 5, 2026), an outside investment analyst was charged with trading based on access to their employer’s clients’ upcoming securities offerings and clinical drug data, allegedly realizing more than $300,000 in illicit profits. A parallel criminal action filed by USDOJ;
• In SEC v. Gerard Ryan (S.D.N.Y.) (filed June 4, 2026), a partial (bifurcated) settlement was entered against a defendant who obtained nonpublic information from a family member who worked at a company that learned that one of their drugs had been approved by FDA. The defendant family member allegedly and made trading profits of $9,260. While the defendant agreed to permanent injunction, the parties chose to litigate the amount of monetary relief in court. The family member defendant previously pled guilty to criminal securities fraud charges filed by USDOJ;
• In SEC v. Justin Jennings and Vortex Strategies LLC (D.N.J.) (filed June 23, 2026), the  defendant allegedly misappropriated material nonpublic information from the work laptop of his then-romantic partner, who worked at a strategic communications and investor relations firm serving public companies. The defendant allegedly then traded ahead of eight corporate announcements, generating approximately $2.7 million in illicit profits. A parallel criminal action was filed by USDOJ;
• In SEC v. Casey Muggleston (D. Del.) (filed June 24, 2026), an engineer allegedly traded on nonpublic information about the planned restart of an nuclear power plant, generating approximately $1.4 million in trading profits. In addition to the SEC case, a parallel criminal prosecution was filed by USDOJ;
• In SEC v. Weiguo Zhai (D. Md.) (filed July 8, 2026), the member of pharma company due diligence team evaluating potential tender offer who traded in target company shares earning $10,000 in illicit profits in own and spouse’s accounts, settled with the SEC. The defendant agreed to pay that amount in disgorgement and the same amount in civil penalties, pay $1500 in prejudgment interest, and to entry of permanent injunction;
• In SEC v Trijya Vakil and Neeraj Visen (S.D.N.Y.) (filed July 10, 2025), a member of a due diligence team who traded in shares of a company being acquired allegedly made $2,447.50, as well as tipping a friend who made $109,427. Both the insider and friend agreed to judgments and injunctions with the SEC, with monetary relief to be determined later either by consent or through litigation. Both also pleaded guilty to criminal charges in parallel USDOJ actions;
• In SEC v. Jamal (“Jimmy”) Chammout, et al. (E.D. Mich.) (filed July 17, 2026), the SEC partially settled an action brought against a  director/senior executive and three of their friends who he allegedly tipped about a planned acquisition. The director/senior executive settlement included a civil penalty of $497,124, a permanent injunction and a four-year director/officer bar. Two of the friends agreed to pay disgorgement in the amount of their trading profits, plus prejudgment interest and penalties, and to the imposition of permanent injunctions. The case against the third friend is pending;
• In SEC v. Jesse R. Mitchell (S.D.N.Y) (filed Aug. 20, 2026), the SEC charged an advertising company senior executive for trading in their employer’s stock and options before two earnings releases (during blackout period and while in possession of the nonpublic earnings information), netting approximately $338,000 in profits. A parallel criminal action was filed by USDOJ;
• In SEC v. Gavin Wolfe, et al. (S.D.N.Y.) (filed Aug. 21, 2026), the SEC charged that an investment banker provided a tip about a potential acquisition to a long-time friend and business colleague who made $18.5 million by trading in the stock of target company, and also tipped others who made over $515,000 in trading profits;
• In SEC v Justin Chen, June Zhen (E.D.N.Y.) (filed August 18, 2025), two employees of a company that assisted clients in making public filings on SEC EDGAR system were charged by the SEC for allegedly trading on nonpublic information to make over $2 million in trading profits. A parallel criminal action was filed by USDOJ.

KEY TAKEAWAYS

• Misappropriation remains the dominant theory. These actions largely involve people who took confidential information entrusted to them by an employer, a client, or a partner rather than corporate insiders trading their own company’s stock.
• Trading while in possession of confidential information is the law. Many people fail to understand this key part of the law of insider trading – which is not found in a statute but developed through caselaw. Trading does not have to be done based on the confidential information – just while in possession of the confidential information.
• Confidential information is much more than most people think. The SEC and courts consider an employee’s trading to be illegal even when they only knew something about their own division that indicated positive or negative results. An employee also does not have to have conclusive information about the company as a whole – information about a significant division of the company or rumors about the company’s performance could be enough.
• Insider trading prohibitions apply even to employees who are not notified of a trade blackout period. An employee does not have to be notified that trading is prohibited for their trading to be a violation. It is the employee’s responsibility to determine whether they have confidential information that bars them from trading – typically by consulting with the company’s attorneys or human resources department.
• “Outsiders” can be targets for “Insider Trading.” Investment advisers, law firms, and professional services providers are often the only targets in these actions.
• Parallel criminal cases continue to be brought in many matters.
• Even small trading profits or avoidance of losses can result in charges.

HOW WE CAN HELP

Braganca Law LLC represents individuals and firms in SEC investigations, enforcement proceedings, and coordinates with criminal defense specialists in parallel criminal matters involving insider trading and other alleged violations of the securities laws. If you have received a document request, a subpoena, or a FINRA or SEC inquiry, or have reason to believe one may be coming, we are available to assist. We also assist people in determining whether they have, in fact, traded in violation of the law and the appropriate steps to take.

1 See, e.g., https://www.npr.org/2026/07/16/nx-s1-5896223/kalshi-trump-white-house-teleprompter-operator-bet.

2 See,e.g., https://www.pbs.org/newshour/politics/trump-pardons-former-republican-congressman-convicted-of-insider-trading.

3 See https://fortune.com/2026/08/12/trump-media-truth-api-insider-trading/.

4 Approximately 20% of all SEC staff exited the Commission by the end of September 2025. See, e.g., https://www.gao.gov/products/gao-26-107813. Based on the number of SEC attorneys who have withdrawn from federal court cases in which we are counsel, the exodus has not slowed down since then.

5 See https://www.sec.gov/newsroom/speeches-statements/atkins-townhall-05062025 (Paul Atkins Opening Remarks at the SEC Town Hall (May 6, 2025).

6 See https://www.barrons.com/articles/sec-financial-fraud-enforcement-david-woodcock-2f7e01e6.

This advisory is provided for general informational purposes only. It does not constitute legal advice, and it does not create an attorney-client relationship.