What Is Insider Trading?
Insider trading is most often discussed in the context of criminal activity
by one or more members of a company. However, according to the
U.S. Securities and Exchange Commission, there is such a thing as legal insider trading: “The legal version
is when corporate insiders—officers, directors, and employees—buy
and sell stock in their own companies. When corporate insiders trade in
their own securities, they must report their trades to the SEC.”
This means that there are proper channels provided for insiders who wish
to trade within their own company.
Illegal insider trading, on the other hand, involves deliberate circumvention
of the provided channels. This happens when someone with privileged access to nonpublic information
(such as a financial officer, director, or other executive with special
knowledge) buys or sells stock in a company. It is also quite common for
illegal insider trading to involve and greatly benefit insiders’
friends and family members.
Who Is Affected by Illegal Insider Trading?
Over the years, many have argued that insider trading is a victimless crime.
Many have even proposed that more free exchange of insider information
is good for the economy. However, others say that it poses long-term damage
to the market as a whole and ultimately harms everyone. Whatever your
perspective, an accusation of illegal insider trading is serious and could
lead to serious consequences such as fines, imprisonment, and more.
What If I Have Been Accused of Insider Trading?
If you or someone you know has been accused of insider trading, our
team at Tomeo Sills, LLC, should be your only option for a Connecticut criminal defense attorney.
We are committed to helping you achieve the best possible outcome in your case.
Make us your legal advisors by calling us at (844) 913-7747 or schedule your free consultation