Illegal insider trading is the trading of a stock that is publicly traded by someone who has obtained non-public information about that stock. This information must be material; in other words, it is likely to impact an investor’s decision to buy the stock, thus affecting the price of the stock. Transactions like illegal insider training are monitored by the Securities and Exchange Commission, or SEC, which is the government agency that is responsible for monitoring financial transactions in order to protect investors and the U.S. banking system. Insider trading is a serious crime with tough penalties, so if you’ve been charged with insider trading, it is wise to consult with an experienced white collar crime lawyer as soon as possible.
Why Some Insider Trading Is Illegal
Insider trading occurs every day in the U.S., and not all of it is illegal. The SEC defines insider trading as “the buying or selling a security, in breach of a fiduciary duty or other relationship of trust and confidence, on the basis of material, nonpublic information about the security.” The goal of the SEC in making some insider trading illegal is to ensure that the marketplace remains fair for traders. Those who have nonpublic insider information have an unfair advantage over those who do not, and this is the factor that makes some types of insider trading illegal.
When Insider Trading Can Be Legal
When people hear the phrase, “insider trading”, they generally think of a criminal activity. However, much insider trading is perfectly legal. If an insider, or person with nonpublic knowledge of a security, trades the security and registers the transaction with the SEC, the transaction is legal because the required protocols from the SEC for making such a transaction have been followed. As long as this type of transaction is submitted electronically to the SEC by filing the proper forms and is also disclosed on the trading company’s website for all to see, it is legal. If you have questions about whether or not an insider trading transaction is legal, it is always best to consult with a skilled white collar crime lawyer.
Call to Schedule a Free Consultation With a White Collar Crime Lawyer Today
If you have been charged with illegal insider trading, call to schedule a free consultation with a white-collar crime lawyer today. Insider trading is a serious charge that can negatively affect both your business and personal reputation. The experienced legal professionals at the Law Offices of John D. Kirby will thoroughly evaluate your case and give you the legal advice you need to stay out of trouble. Give us a call at 619-557-0100 and speak with our friendly staff during a consultation.