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 executives 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 a 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 The Sills Law Firm, 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 (860) 524-8118 or schedule your free consultation today.