Insider trading cases usually involve an extensive collection of documents, and wiretaps add another layer of complexity. When the DOJ or FBI wishes to conduct a wiretap, it must submit an application to a federal judge, who will grant the application upon a finding of probable cause that a criminal offense has been or is about to be committed and that particular communications concerning the offense will be obtained through the wire intercept.1
Federal prosecutors first used a wiretap to secure an insider trading conviction in 2011.2 As some federal prosecutors have recently shown an increased proclivity toward pursuing alternative theories to insider trading cases—e.g., wire fraud—it should be expected that wiretapping will continue to be a useful tool for the government.
In the UK, the FCA can conduct surveillance and other methods of covert information gathering pursuant to the Regulation of Investigatory Powers Act 2000. This includes accessing electronic data protected by encryptions or passwords, as long as an individual’s right to privacy under Article 8 of the European Convention of Human Rights is considered and protected.3
All covert surveillance must be approved by a Head of Department in the FCA’s Enforcement Division and must be for the purpose of preventing or detecting crime. The proposed action must be necessary and proportionate, taking into consideration the seriousness of the offense, the amount of material that might be gathered, and whether there are other less intrusive ways to obtain the same result, among other things.
In France, the AMF can obtain data held by telecommunications operators with prior authorization from the independent Controller of Requests for Connection Data (Contrôleur des demandes de données de connexion) (Article L. 621-10-2 of the CMF).
1 18 USC § 2518(3).
2 See United States v. Rajaratnam, 719 F.3d 139, 160 (2d Cir. 2013).
3 See Financial Conduct Authority, Enforcement Guide, § 19.5.1 (Release 36, Feb. 2019).