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I know at least once case where the insider (a famous Ohio State professor) didn't profit, but his friends and relatives made $1M on his tip. He still got 5 years in prison. http://www.bizjournals.com/columbus/stories/2005/12/12/daily...

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He and his friends probably took plea agreements. There is nothing that says the feds can't pursue bad cases, and if you don't take it to trial, then you go to prison. But according to the most recent rulings, there are only very limited circumstances where someone can be convicted on insider trading.

> There is nothing that says the feds can't pursue bad cases

It's unfortunate that there isn't something that says that.

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