Nevertheless, violators continue to be subject to Federal, criminal, and civil prosecution, face destruction of their careers, and public disgrace. Since 1984, Federal laws have increased the potential sanctions for trading-related violations by several orders of magnitude. Although the restrictions on insider trading have been fashioned largely by the courts, three Federal statutes give judge-made law significantly more deterrent effect. Those who intentionally communicate or tip private market-sensitive information to a third person who then profits by trading securities are subject to the same sanctions. Washington's latest move to bolster market integrity is the Securities Enforcement Remedies and Penny Stock Reform Act of 1990.
Professionals also face discipline by private and state licensing bodies.
And securities law violators are generally subject to state regulatory authorities, and often face exposure in private civil damage actions. Proceedings such as SEC v. Jabour, et al. The NYSE also uses its Automated Search and Match System to compare trading data with a database which contains information on 75,000 companies and subsidiaries, and 500,000 executives, bankers, attorneys and accountants. The NASD employs the Real-Time Stockwatch Report to identify unusual trading activity, and the Insider Exception System to track and analyze stock closing prices before significant developments. The exchanges and the NASD coordinate their monitoring programs through use of the Intermarket Surveillance Information System.