This time, they’re not messing around. According to a recent report from Bloomberg, former BlackRock Inc. portfolio manager Mark Lyttleton was found guilty of insider trading by a London judge. His one-year sentencing reflects growing sentiment for tougher penalties associated with stock market fraud.

Lyttleton used privileged information from his role at BlackRock to advantage the commodities sector. Specifically, he bought shares of EnCore Oil Plc ahead of a proposed takeover, and Cairn Energy Plc a month later. Court data indicates that the portfolio manager “made about 45,000 pounds from the EnCore trading and lost about 10,000 pounds on Cairn.”

There was no question as to Lyttleton’s guilt, stated the presiding judge. EnCore and Cairn were on BlackRock’s stop list, which meant that no employee of the latter could trade shares of the former two. When Lyttleton was arrested by authorities, they found prepaid phones which had the number of the founding partner of a Swiss firm through which the insider trading was executed. Although his attorney contends that the phones were purchased after the trade, it still reeks of collusion.

Although insider trading is obviously legally and ethically wrong, it does bring up an interesting question — how effective is it? At the end of the day, the stock market has its own ethos. On more than several occasions, company shares have collapsed after releasing fundamentally positive news. In other cases, the stock market winks favorably on poor data. This could be in anticipation that a company will start cutting costs, thus driving up earnings per share ratios.

Clearly, insider trading wasn’t the perfect panacea for Lyttleton. Although he made money on the Encore deal, he ended trimming some gains via Cairn. It’s still a “win” as far as the insider trading tactic is concerned, but the stock market still caught Lyttleton by surprise. Thus, possessing privileged information isn’t necessarily proof of rigged markets; it’s how you use that information. Even then, the success of insider trading is dependent on broader investor psychology — and that entails risk.