White Collar

Insider Trading Cases to Watch in 2022

By: Lucosky Brookman
Insider Trading Cases to Watch in 2022

As we enter 2022, several major insider trading cases are on the horizon that could set new precedents in this area of securities law. Insider trading refers to the unlawful trading of a public company's stock based on material, nonpublic information in violation of securities laws. The SEC has made pursuing insider trading violations one of its top priorities in recent years.

Some of the most notable insider trading cases expected in 2022 include:

U.S. v. Matthew Panuwat

Matthew Panuwat, a former business consultant, was charged in November 2021 with using confidential information from the Thai Central Group to illegally trade stock options and make over $5 million in illicit profits. Panuwat allegedly obtained the confidential sales reports of the company ahead of its quarterly earnings announcement in 2016 and traded options based on the expected overperformance.

This is shaping up to be one of the most significant insider trading prosecutions related to options trading. Options trading is an area that prosecutors have increasingly focused on in recent insider trading cases. Unlike trading the underlying stock, options enable traders to leverage inside information for exponentially greater profits and are popular among sophisticated traders.

For example, prosecutors have estimated Panuwat made over $5 million in illicit profits from options tied to just $43,000 in initial investments by exploiting the insider sales reports. As options trading surges in popularity, we expect regulatory scrutiny of their use in insider trading schemes to continue rising.

The Panuwat case trial is expected to begin in early 2022. The outcome will be closely watched by prosecutors looking to secure a conviction in a high-profile options insider trading case. Securities attorneys will be monitoring whether new case law arises from the trial clarifying standards for proving options insider trading.

SEC v. Goldman Sachs

In 2020, the SEC filed a civil lawsuit against Goldman Sachs and one of its bankers accusing them of insider trading in the securities of Kinder Morgan ahead of its acquisition by Berkshire Hathaway. The banker allegedly obtained confidential information about the acquisition from his spouse, who was an attorney working on the deal. The SEC is seeking disgorgement of over $3 million in gains in addition to civil penalties.

This case falls into the classic fact pattern of a tipper family member passing insider information to a tippee spouse or relative, who then illegally trades on the confidential data. These kinds of familial insider trading cases have been prosecuted aggressively by the SEC, especially when they involve M&A transactions.

With discovery ongoing, this case is likely to see major developments in 2022. The extent to which Goldman Sachs is implicated by the actions of its banker will be closely watched. Prior cases have examined when brokerages may face institutional liability for failure to prevent insider trading by employees. This case gives the SEC another chance to advance standards on institutional supervision and compliance procedures.

U.S. v. Stephen Buyer

Stephen Buyer, a former U.S. Representative and consultant, was charged in 2021 with insider trading in the securities of Sprint based on confidential information ahead of its merger with T-Mobile. As a consultant, Buyer allegedly obtained information about the pending merger and purchased Sprint securities that netted over $350,000 at the time the merger was announced. Buyer has pleaded not guilty and is currently scheduled to stand trial in February 2022.

This case shows regulators targeting insider trading even by elite corporate insiders and consultants, rather than just company employees. It serves as a warning that well-connected deal consultants are also subject to insider trading laws when they misuse merger or acquisition data.

The outcome in this case will be monitored closely by prosecutors looking to broadly enforce insider trading prohibitions beyond just company personnel. Securities attorneys will watch whether new standards emerge on what constitutes a prosecutable insider in modern business settings where deal information may circulate among external consultants.

SEC v. Matthew Panuwat and Olga Panuwat

In a related case, the SEC filed a lawsuit in 2021 alleging that Matthew Panuwat tipped his wife Olga Panuwat regarding the confidential Thai Central Group sales reports, allowing her to profit from insider trading in options. Olga Panuwat allegedly made approximately $600,000 from these illegal trades. The SEC is seeking disgorgement and civil penalties.

This tipper-tippee insider trading case is expected to move forward alongside the criminal case in 2022. Tipper-tippee cases have been an aggressive focus of the SEC, targeting not just the original insider source but also the recipients of the unlawful tips.

The case could establish new precedents on the extent of liability for secondary tippees if they are family or close associates rather than direct colleagues or associates of the tipper. It also highlights the prevalence of tipping confidential corporate information to spouses and relatives, which regulators are dedicated to prosecuting.

U.S. v. Telemaque Lavidas

Lavidas, the son of a former Ariad Pharmaceuticals board member, was found guilty in 2021 of insider trading for trading Ariad stock based on tipped confidential drug trial results that showed the drug's efficacy. Lavidas is currently scheduled to be sentenced in early 2022, where he faces up to 20 years in prison.

The outcome of his sentencing could signal a strong stance against familial insider trading. Regulators have been forceful in pursuing cases where insiders pass confidences to relatives and associates who then trade on the information. Lavidas' conviction shows that being a secondary insider or tippee recipient rather than original source of data is no defense.

However, some attorneys argue Lavidas' multi-decade potential sentence is disproportionate given he was an indirect tippee. His upcoming sentencing will be closely followed to see whether judges concur that harsh sentences for secondary family tippees are appropriate. This could influence sentencing norms in future tipper-tippee cases.

Key Insider Trading Trends to Watch

These cases highlight several key trends in insider trading enforcement that we expect to continue shaping cases in 2022:

Targeting Insider Options Trading: With options enabling greater leverage of inside information for outsized profits, regulators are focusing more on options insider trading. Cases like Panuwat's will drive this trend.

Scrutinizing Family Tippers and Tippees: Familial insider trading remains an area of emphasis, as in the cases against Panuwat, Buyer, and Lavidas. Prosecuting relatives who pass and trade tips is a priority.

Pursuing Institutional Liability: Regulators want to hold institutions like brokerages accountable for lax controls enabling insider trading, as highlighted in the Goldman Sachs case. Companies face liability risk if employees trade on material nonpublic data.

Insider Trading by Consultants: As shown in Buyer's case, insider trading prosecutions are extending beyond company insiders to outside consultants and elite business networks exposed to deal information.

Harsher Sentencing of Tippees: Lavidas' potential 20-year sentence indicates prosecutors advocate stiff punishment for tippees, even if they are indirect recipients rather than original sources.


These cases highlight how insider trading remains among the most high-stakes areas for SEC enforcement and securities litigation. With inside information leading to millions in ill-gotten gains, companies must implement robust confidentiality safeguards and employee training programs. As the major cases proceed through 2022, securities attorneys, prosecutors, and compliance departments will be watching closely for any new precedents set in this rapidly evolving area of securities law. The outcomes will shape defense strategies and prosecutorial approaches for years to come.