A UCLA law professor will testify Wednesday before a congressional panel in Washington, D.C., warning that insider trading by government officials poses a serious threat to market integrity.
Andrew Verstein, a professor at the UCLA School of Law, is scheduled to appear before the U.S. House Financial Services Subcommittee on Capital Markets during a hearing on fraud and exploitation in capital markets.
In prepared remarks, Verstein raises concerns about high-value trades occurring shortly before major government actions, describing such activity as consistent with red flags commonly associated with insider trading.
“These patterns exhibit the worrisome hallmarks investigators are trained to identify,” Verstein is expected to say. “Whether anyone is actually investigating is a question this committee should be asking … Suspicious trading does far more damage when the public has no confidence anyone is investigating.”
Verstein is also expected to warn that declining enforcement capacity at the Securities and Exchange Commission could heighten risks, citing reduced staffing, fewer whistleblower incentives and limits on key market surveillance tools.
He said maintaining public trust in financial markets depends on effective oversight and accountability, cautioning that weakened enforcement could raise costs, deter investment and erode confidence.
Verstein serves as vice dean for curricular and academic affairs at UCLA Law and co-directs the Lowell Milken Institute for Business Law and Policy.