What are the civil penalties associated with insider trading?

In the context of insider trading, civil penalties can be quite severe to deter such unethical behavior in the financial markets. The correct answer is treble damages, which means that individuals found guilty of insider trading can be ordered to pay three times the profit gained or loss avoided from the violation. This enhances the deterrent effect against insider trading because the financial consequences can be substantial.

While double damages are a type of penalty in some legal contexts, they do not apply specifically to insider trading cases. The concept of maximum fines only is also restricted because it doesn't capture the full scope of penalties associated with the offense, and stating that there are no penalties would be incorrect, as insider trading is expressly prohibited and enforced by regulations. Therefore, treble damages serve not only as a form of punishment but also as a way to dissuade individuals from committing such illegal acts in the future.