Insider Trading

Most financial crimes are some variation on theft, even though the property being stolen is less tangible than cash or physical items.  For example, identity theft is when you steal confidential information, such as bank account numbers, that enables you to make transactions in someone else’s name without the person’s consent.  Wire fraud is when you make false statements to persuade someone to send you an electronic payment.  Embezzlement sometimes involves unauthorized transfers from one’s employer’s bank account, but sometimes it is as simple as stealing cash from the cash register at your workplace.  By contrast, insider trading does not sound so bad.  Isn’t it legal to make trades on the stock market?  One can draw parallels between stock market investing and gambling, but the stock exchange is subject to detailed regulations; the federal government has thought carefully about what is legal on the stock market.  If you are facing criminal charges for insider trading, contact a Tampa white collar crime lawyer.

Why Is Insider Trading Against the Law?

Insider trading occurs when you use material, non-public information as a basis for your decision to buy or sell shares of stock in a publicly traded company.  In this context, the information is material if it is relevant to stock market investing decisions, such as a company’s recent profits or losses or its plans to merge with another company.  The information is not public if the company has not announced it in its quarterly financial reports or news sites have not published articles about it.  In other words, stock market trades are only fair if they are based on information in the public domain.  Making investment decisions based on non-public information is considered cheating and can result in criminal penalties.

Material, non-public information about a company’s performance is sometimes called inside information, because the only people who know it are certain employees of the company.  Companies may set their own rules about employees discussing inside information with their families and friends.  Most defendants in insider trading cases are employees of the companies whose stock is involved, or else they are people with whom employees have shared information, sometimes in exchange for bribes.

Staying on the Right Side of the Law With the Stock Market

The law does not universally forbid employees to buy stock in companies that employ them.  If you have inside information about your employer and you buy or sell its shares, you must file disclosures with the Securities and Exchange commission, in which you state which information you found out, when you found it out, and how this influenced your decision to buy or sell the shares.  If you are being accused of illegally sharing inside information about your employer, you should hire a lawyer.

Contact Tampa Criminal Defense Attorney Bryant Scriven

A criminal defense lawyer can help you if you are facing charges for financial crimes such as insider trading or conspiracy to commit insider trading.  Contact Scriven Law in Tampa, Florida to schedule a consultation.

Source:

news.fiu.edu/2023/insider-trading-the-legal-kind-is-a-lot-more-profitable-if-you-work-for-a-multinational-company