Insider-Trading Paradise: Where No One Goes to Jail
- Mexico has made insider-trading fines public only since 2008
- No one’s been criminally charged and fines have been small
A stock plunges just before bad news hits, or soars ahead of a bullish headline. On Wall Street, that sounds like it could be insider trading. In Mexico, it’s more like business as usual.
Insider trading is rife in the $400 billion Mexican stock market -- and almost everyone knows it. As in the U.S., trading on non-public information is illegal. Mexico’s financial regulator has been making penalties public only since 2008, and just 28 people have been punished since then. It takes an average of more than five years for the agency to issue penalties for insider dealing. No one has been criminally charged or gone to prison, and while U.S. punishment can run into the tens of millions of dollars, fines in Mexico have added up to a mere $60,000 per perpetrator. The Mexican regulator said it only acts based on its constitutional authority and declined to comment on whether it does enough to stem insider trading.