The recent arrests of NBA figures Chauncey Billups and Terry Rozier in connection with federal gambling probes have garnered national attention, but financial misconduct is hardly new to the business world.

For years, scandals surrounding insider trading, which involves illegally buying or selling stock based on non-public information, have ensnared powerful figures from corporate executives to media personality Martha Stewart.

Here’s a look at some of the most infamous controversies linked to insider trading.

WHAT IS INSIDER TRADING?

Rajat Gupta and Raj Rajaratnam

Former Goldman Sachs Group Inc. director Rajat Gupta was sentenced to two years in prison for illegally leaking confidential boardroom information to Raj Rajaratnam, former hedge fund manager and founder of the Galleon Group.

The tips helped Rajaratnam make millions of dollars between 2003 and 2009, according to the U.S. Department of Justice (DOJ).

Rajaratnam was sentenced in 2011 to 11 years in prison — at the time marking the longest insider trading sentence in U.S. history — and ordered to forfeit $53.8 million and pay a $10 million fine.

Kenneth Lay and Jeffrey Skilling

Former Enron CEOs Kenneth Lay and Jeffrey Skilling were convicted in 2006 on charges including conspiracy, securities fraud and wire fraud tied to the energy giant’s collapse.

A federal jury found they deceived investors about Enron’s finances while selling company stock. Lay was convicted on all six counts against him. Skilling was found guilty on 19 of 28 counts, including insider trading.

“The convictions stemmed from a wide-ranging scheme that Lay, Skilling and other Enron executives engaged in at various times between at least 1999 and 2001, to deceive the investing public, the U.S. Securities and Exchange Commission (SEC) and others about the true performance of Enron’s businesses,” federal prosecutors said at the time.

Skilling was initially sentenced to 24 years in prison but later was resentenced to 14 years. Lay died in July 2006, and a federal judge subsequently voided his conviction.

SEC LAUNCHES INSIDER TRADING INQUIRY INTO CRYPTO EXCHANGES

Martha Stewart

In 2003, Martha Stewart was charged by the SEC with insider trading, accusing her of selling 4,000 shares of ImClone Systems in 2001 following a tip from her stockbroker.

The tip allegedly followed after ImClone’s CEO sold his shares ahead of a pending Food and Drug Administration (FDA) decision on a cancer drug. When the FDA rejected the drug, ImClone’s stock fell 16%, but Stewart avoided losses of more than $45,000, according to the SEC. 

While Stewart was not convicted of insider trading, she was found guilty of making false statements, conspiracy and obstruction of justice. She served five months in prison, according to Investopedia.

Steve Cohen

In 2016, Steve Cohen, the billionaire hedge-fund manager and now owner of the New York Mets, was accused of “failing to supervise” two employees and prevent them from insider trading while under his watch at his former hedge fund, SAC Capital Advisors, according to the SEC.

He was barred from managing outside client money until 2018.

The firm pleaded guilty in November 2013 to securities fraud and paid $1.8 billion in fines, which at the time marked the largest insider trading penalty in U.S. history.

NEW SEC RULES TARGET CORPORATE INSIDER TRADING

Ivan Boesky 

A high-profile arbitrageur on Wall Street in the 1980s, Ivan Boesky made hundreds of millions by betting on companies he knew were about to be taken over. His strategy involved buying shares prior to merger announcements — a practice that later proved to rely illegally on insider information.

He was sentenced in 1987 to three years in prison and fined $100 million, according to Investopedia.

He died in 2024 at age 87, Reuters reported.

Rajat Gupta, Raj Rajaratnam, Martha Stewart, Steve Cohen and Jeff Skilling did not immediately respond to FOX Business’ request for comment.