Are you facing accusations of insider trading? You need representation from an experienced criminal defense law firm immediately! The SEC has a zero-tolerance policy when it comes to insider trading and takes every investigation seriously even if the dollar amount in question is small. Whether you are a wolf of Wall Street or a small-time trader, the SEC will go after you with everything they have.
If you are under investigation for insider trading, Stechschulte Nell can help. Here we share our years of experience handling insider trading cases and track record of success. Keep reading to learn the ins and outs of insider trading…
What is Insider Trading?
Insider trading is a criminal activity where an individual uses insider information that has not been made accessible to the public to financially benefit from either buying or selling a stock.
The following criteria determine whether a trade was considered “insider trading”:
- An individual was in a position of owing a fiduciary duty to a company, another individual, or some other entity.
- An individual sold stock to avoid a loss based on a tip or piece of information that the stock was going down in price.
- An individual committed a related crime such as stealing information and then proceeded to make a trade based on this information, a.k.a. corporate espionage.
What are the Penalties for Insider Trading?
Insider trading is considered a white-collar federal crime – meaning it is a non-violent financial crime. However, both prosecutors and federal agencies can and will be aggressive when it comes to an investigation of insider trading.
Although it has the white-collar crime label, if an individual is convicted, penalties are severe and may include a lengthy federal prison sentence, hefty fines, and a lifetime ban on serving in a position involving a fiduciary duty.
Regulations to Prevent Insider Trading
To prevent insider trading, the SEC put in place a regulation that requires company insiders to turn over any profit they make off a sale or purchase of a stock trade to go directly to their company within six months of the sale or trade.
This regulation is intended to discourage company officers and owners from making purchases or sales that will benefit them on a personal level. Corporate officers and owners who own a certain percentage of stock are also required to file disclosures when they sell stock.
What to do if Accused of Insider Trading?
If you have been accused of insider trading, you must take immediate action to keep the case from being turned over to the court system. Our criminal defense law firm suggests taking the following steps:
- Upon being notified of an accusation, immediately contact a criminal defense attorney who is experienced in handling this type of federal crime.
- Start cooperating with the SEC, however, do so in the presence of your legal counsel. This could end an inquiry before it turns into a formal investigation.
- Avoid disclosing any personal, financial, and accounting information to the public. SEC and federal investigators are looking at every step you make, including any posts on your social media accounts.
Need an experienced insider trading lawyer? Ben Stechschulte and the team at our Tampa, FL defense law firm can help mitigate your legal risk. Contact an attorney today.
Defending Your Insider Trading Case
If you are facing insider trading charges, do not risk losing your freedom by hiring an inexperienced criminal defense attorney. The legal team of Stechschulte Nell has the knowledge and experience necessary to defend your insider trading case.