According to the U.S. Securities and Exchange Commission (SEC), insider trading is essentially the buying or selling of a security that is in breach of a fiduciary duty, while in possession of information that is not available to the public regarding that security. For example, if someone inside the company intentionally passes along information to an outsider who places trades based on that information, this would be considered an act of insider trading. If you have been accused of insider trading, it is imperative that you hire skilled legal representation as soon as possible to ensure your rights are protected.
Different Forms of Insider Trading
While the aforementioned example is one form of insider trading, there are many other forms of it, including:
- Members of an organization purchase a security: When employees or members of a publicly traded company have access to information that the public does not have access to and they buy or sell securities based on their knowledge to profit from it, this is considered insider trading. That said, employees are also given stock options, so there are some cases in which they are legally allowed to purchase shares, though the rules are often quite complex.
- Professionals who do business with a corporation: Professionals, such as bankers, lawyers, and brokers might have access to confidential documents of their corporate clients and they might use abuse the information they have access to in order to make a profit.
- Friends and family of corporate employees: If a corporate employee shares confidential information with friends or family that was not meant to be shared with the general public, and those individuals buy or trade securities based on that information, this would also constitute insider trading. Unfortunately, sometimes these disclosures are not made with the intention of engaging in any sort of legal activity, though in some cases they are made intentionally and with the expectation of taking a cut of the profits.
- Government officials: Government officials might have access to confidential information in order to carry out their duties. In some cases, they might engage in insider trading by using the information they have access to.
- Hackers, spies, or other thieves: Of course, not all insider trading happens through individuals who work for a publicly traded company. Some clever individuals find ways through which they are able to gain access to corporate information in order to conduct securities fraud.
White Collar Criminal Defense Attorney in Chicago
If you are facing charges for insider trading, now is the time to obtain the skilled legal representation you need to protect your rights and your future. At the Law Office of Steven Fine, our Chicago criminal defense attorney is backed by over 20 years of legal experience and a proven track record of success. Instead of facing these charges alone, put your trust in an attorney who will provide the aggressive legal defense you deserve.
Get started on your case today and reach out to our law firm at (312) 436-0638 to request a free initial case evaluation. We are available to take your call 24/7.