My experience is that funds & staff that do have exposure to opportunities for insider info because they talk to outsiders like (brokers, company execs & IR, research providers, etc) actually get even brighter lines & rigid boxes around them.
For example - all emails to above go through compliance first & include a disclaimer that you are a market participant and do not wish to receive MNPI. Meetings with above have compliance sit in, etc. People are urged to self report if someone does volunteer something stupid to you that they shouldn't have, and then you sit out from trading it for some period, etc.
They make it very clear that the upside/downside risk is asymmetric. Hey maybe you can cheat and make 10% more this year. Or you can go to prison for 10 years, lose your home, have your wife leave you, and never work in the industry again.
Really? I doubt it. Most insiders never get caught, and those that do get relatively small fines and sentences. Many sentences are suspended or deferred. Remember: To clawback (fine) insider trading, you need to clearly prove specific profits were gained via insider trading. It is insanely hard. Even when caught, it is a tiny fraction of their wealth.
Raj Rajaratnam is one of the most notorious in the current generation. He only did 7.5 years. And Stephen Cohen had so many layers in his onion legal strategy that SEC could never nail him down.
For many normal people, having a case broaght against you is soul destroying. Yes you might get off but you have legal expenses, stress of not knowing what's going to happen, you may be unable to work at your job in the meantime. Just because you don't go to jail does not mean you are getting off free.
For example - all emails to above go through compliance first & include a disclaimer that you are a market participant and do not wish to receive MNPI. Meetings with above have compliance sit in, etc. People are urged to self report if someone does volunteer something stupid to you that they shouldn't have, and then you sit out from trading it for some period, etc.
They make it very clear that the upside/downside risk is asymmetric. Hey maybe you can cheat and make 10% more this year. Or you can go to prison for 10 years, lose your home, have your wife leave you, and never work in the industry again.