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The Insider Trading and Securities Fraud Enforcement Act (ITSFEA) re-codified the Insider Trading Sanctions Act of 1984 to make it Section 21A of the Exchange Act. Under the ITSFEA, a monetary penalty of up to three times the amount of the gained profit that was gained or the loss that was avoided during the sale of a security while the seller was in possession of material that was considered to be non-public in nature.
In 1988, the ITSFEA was amended to make the penalties applicable to controlling persons and also to include people who violate the Act by disseminating the information.
Law firms that are involved in insider trading and securities fraud cases are inundated with a large amount of documents during the discovery phase. Discovery requests must be responded to, but before any document (electronic or otherwise) leaves a law firm, it must be checked for confidentiality and privileged information. Since this can be a time consuming task, many attorneys retain experienced, temporary document review attorneys. The temporary attorneys are provided by legal staffing agencies and are experienced in the needed field (such as the insider trading and securities fraud field) and in document review.