Insider trading based on inside material information is against the law, no matter what. But what does it mean when the illegal traders botch the information so badly that they actually lose money?

Prosecutors chose to focus on the $20 million in gains that the merry band of insider traders led by Raj Rajaratnam reaped. But the New York Times reports that overall, he lost money from his illegal activity. A disastrous trade on AMD--whether it was based on illegal inside information or not is unclear--resulted in a $30 million loss. Ouch.

This could mitigate the severity of the case just a bit. "The higher the gain, the higher the recommended sentence," one expert told the paper. You have to wonder if prosecutors erred by making the AMD trade part of their case. We'll have to see how this plays out. There may be some sort of plea deal in the works. 

For more:
- here's the article

Related Articles:
Is it research or insider information?
Who is Raj Rajaratnam?
How many more to be charged in scandal?