Defense options for insider trading allegations

The term “white collar crime” typically refers to illegal activity that has been carried out in a nonviolent manner for the purpose of financial gain. It’s a broad term that may be relevant in any number of situations, including those where allegations of intellectual property theft are purported. If you work or invest in a capacity that includes securities, certain actions place you at risk for insider trading accusations, which can spark some serious legal problems. 

Insider trading is a complex issue and resolving problems that arise because of allegations of illegal activity can be quite challenging. It’s important to understand exactly what you’re being accused of if you wind up facing criminal charges in court, as well as to know what type of defense options may be available to help you refute those charges in court.  

A basic explanation of insider trading 

In simple terms, insider trading occurs when someone buys, sells or shares information to someone who then buys or sells securities based on that information. For instance, if you’re an employee of law or work at a bank, brokerage or printing firm, and you make trades based on information you learned while providing services to companies whose securities you traded, it may have violated insider trading laws.  

Then again, you might be accused of insider trading outside of an employment capacity if you take advantage of confidential information shared with you by a family member or friend. Another example of insider trading might be a government official who trades based on nonpublic information he or she has learned while carrying out the duties of his or her post.  

What to do if you are facing insider trading charges in court 

Being accused of a white-collar crime can have immediate and far-reaching negative implications in your professional and private life. In many cases, such allegations could place your entire career at risk. The stakes are often high and penalties under conviction might include a prison sentence, as well as substantial fines.  

There are often multiple defense options that are helpful when facing insider trading charges, such as:

  1. Providing evidence to show that there was a pre-existing plan to trade securities
  2. Establishing that a contract was in place that included trading obligations
  3. Showing that the information in question was available to the public
  4. Proving that the defendant was not aware that certain information was confidential at the time

If you are potentially facing insider trading allegations, it’s wise to seek sound legal guidance from someone who is well-versed in this area of law before heading to court or answering questions posed by the SEC or law enforcement.

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