Sentencing Guidelines for Insider Trading

Abstract

When it passed the Sentencing Reform Act of 1984, Congress created the United States Sentencing Commission and envisioned that it would issue sentencing guidelines designed to ‘‘avoid[] unwarranted sentencing disparities.’’ 1 Yet this goal seems increasingly out of reach in the area of white-collar crime, where the recommended sentencing ranges and the sentences judges actually impose on defendants frequently diverge. 2 Indeed, some members of the judiciary have asserted that the exceedingly high Guidelines for fraud offenses reflect a political calculation that is neither substantiated by empirical evidence nor reflective of the ‘‘nuanced reality’’ in the ‘‘trenches where fraud sentences are actually imposed.’’ 3 In the wake of the 2008 financial crisis, politicians,