Insider trading is a violation of federal securities laws. It is a serious charge that could substantially affect a person’s reputation and employability. A conviction for insider trading could also lead to stiff fines, being barred from certain professions, and even prison.
If you were arrested or believe you are under investigation for securities fraud, contact a Greenville insider trading lawyer at your earliest opportunity. An experienced white-collar defense attorney could ensure that law enforcement respects your rights and does not manipulate you into compromising your defense.
Using the information shared by an insider—often an employee or director of a company or one of their family members—and profiting on a stock before the public has access to the information is illegal. The person who shared the information, the person who benefitted from the information, and the broker who handled the transaction could be charged and convicted of insider trading.
The Securities and Exchange Commission (SEC) Rule 10(b)5-1 makes insider trading a crime. The SEC takes a hard line on insider trading because it undermines confidence in the financial markets. Federal authorities invest considerable resources in investigating and prosecuting crimes of this nature.
A Greenville attorney defending someone accused of insider trading could scrutinize the investigation to determine whether law enforcement might have violated the accused’s rights. If so, the legal professional could bring a motion asking the court to dismiss the improperly obtained evidence.
Insider trading could be a civil or criminal matter. When an individual is convicted of insider trading, a prosecutor could seek civil fines of up to three times the amount of profit realized or loss avoided through the transaction. Criminal penalties, including significant jail time, are also possible. It is imperative for someone under investigation to contact a qualified Greenville insider trading attorney immediately before speaking with anyone from law enforcement.
A fiduciary duty is a position of trust. A person has a fiduciary duty to shareholders of a company if they are an executive or director. Lower-level employees may also be in a position of trust and confidence with shareholders, which is enough to confer civil and criminal liability. In addition, employees of law firms, printing companies, public relations consultants, and others may gain access to inside information through their employment. Using the information to profit in the stock market could result in criminal charges.
Non-public information is information only available to insiders or the people the insiders tell—it has not been made public, and an investor who was not “tipped” could not know the information.
This element means that an insider need not have actual knowledge that information was not public. If they should have known the information had not been disseminated, they could be guilty of insider trading.
Prosecutors must prove that a person they charge for insider trading received a personal benefit from trading on their inside information. In most cases, this is a profitable stock transaction, but it could also be compensation from other people the insider provides with information.
People often know they are being investigated before an arrest occurs. They might receive a subpoena, civil information demand (CID), or other requests for documents. Federal agents might execute a search warrant on their office or home seeking trading records or other information.
Contact a highly-trained Greenville insider trading lawyer immediately if you face an investigation or charges. These are complicated cases, and an unwary suspect could inadvertently harm their case by speaking to investigators without legal counsel present. Call today to discuss your situation with a seasoned attorney from Bill Nettles Attorney at Law.