For a 48-year-old former public relations specialist who is currently facing trial over charges of large-scale insider trading, the potential jail term of up to five years is almost a side show. If found guilty on all charges, he can expect to be ordered to pay €24mn to the German government — almost twice the profit he is accused of having made in the allegedly illicit trades, and much more than he ever owned. The debt would probably haunt him for the rest of his life.
Investors often use the same principal in concurrent transactions when they buy and sell stocks. Imagine a trader who buys shares for €1,000 and sells them for €1,200, then uses the €1000 again to buy different shares that he again sells for €1,200. If a court concluded that the trades were based on insider information, the trader would be forced to pay €2,400 to the court.