Are you being charged with insider trading? This is a serious crime that carries fines and potential jail time to those convicted. Having inside knowledge that puts you at an advantage over other investors can be considered illegal in some cases. If you are being charged with or questioned about, insider trading, it is important to speak to a criminal defense attorney in Las Vegas about your case.
Insider trading is a serious crime and one you should never face without an experienced attorney in this area.
What Is Insider Trading?
The term insider trading refers to any situation in which the buying or the selling of any type of investment product or security is done by someone who has non public, material information about that investment security. To determine if this action is illegal, various factors must be considered including when the individual makes a trade of the security. If the material information in the matter – which would influence any investor’s decision – was nonpublic when the trade is made, the action is considered illegal.
Why Is Insider Trading Illegal?
Insider trading often involves tipping others off to what may happen in a company or to an investment because the party has information the public does not have. When this occurs, it creates an unfair advantage for other investors in the company or security. However, if company directors purchase and sell shares, but they inform the public of their transactions, this is not considered illegal.
Insider Trading Examples
Throughout history, a number of big profile insider trading cases have occurred. In September of 2017, for example, Brett Kennedy, a former financial analyst working for Amazon.com, was charged with it. He was accused of giving information about the company’s 2015 first quarter earnings prior to their release to Maziar Rezakhani.
Another big profile case involved Martha Stewart, who was charged with obstruction of justice and securities fraud, which included charges of insider trading. This occurred in 2003 and was related to her sale of ImClone Systems stock. She sold over 4000 shares of the stock based on the information she received from a Merrill Lynch broker which was illegally accessed.
Types of Insider Trading
Many types of insider trading can occur. For example, fraudulent registration of securities is one form. It involves deceiving the purchaser of securities based on untrue information. This can sometimes be deception through omission. The most common form is making buying and selling decisions based on information not otherwise made public. Another form has to do with violations of the Sarbanes Oxley Act of 2002, which involves corporate officers reporting inaccurate or misleading information in reporting requirements.
Insider Trading Laws in Nevada
Insider trading laws are not state-specific. Rather, the Securities and Exchange Commission (SEC) has governance over these types of actions generally because this is not location-based. The SEC will investigate any types of suspected insider trading or securities fraud cases. This is done under SEC Rule 10(b), the law governing this area of trading. If the SEC finds a crime has occurred, then the U.S. Department of Justice will be informed and will take over the case. This department may then bring criminal charges against those involved.
Insider Trading Penalties
The penalties for insider trading include criminal charges amounting to as much as 20 years in jail as a maximum prison sentence. Additionally, the maximum criminal fee charged is $5 million, and $25 million for non-natural persons. This includes those with publicly traded securities. Penalties are based on the severity of the crime as well as on the level of fraud occurring. It is also important to note that civil charges can be brought against those convicted of insider trading as well.
What Defense Options Exist?
Working with a criminal defense attorney for insider trading has become very important both for criminal and civil cases. There are some insider trading defenses that may apply in your case. For example, it may be possible to use a claim of a lack of evidence to support such charges. This can help in some situations because the burden of proof is on the court, not on the defendant. If your attorney can show a lack of sufficient reliable information and evidence, you cannot be convicted of the crime.
Additionally, it may be possible to use defense of government misconduct, if you can prove that the government or the SEC acted in some illegal manner during the investigation. Some individuals may also benefit from a defense showing a lack of intent to willfully commit fraud. Even in these situations, it can be hard to prove your innocence without an attorney by your side.
Schedule a Consultation with Your Insider Trading Attorney in Las Vegas
Do not go to court or speak to any public officer without the guidance of your criminal defense attorney in Las Vegas. Our team is here to help you. We encourage you to call us immediately for a free and confidential case review. We have over 30 years of experience providing aggressive defense to our clients, including for insider trade investigations. Call us at 702-868-8866 or use our online contact form.