Insider Trading Laywer

Stock Market

To ensure full transparency and fairness in securities trading, any publicly traded company must disclose relevant financial and material information in a timely manner. This includes but is not limited to earnings and expenses data, positive and negative news, and operational details. Multiple people within the company can have access to confidential details – and this includes directors, company officers, employees, shareholders, or even personnel.

What is insider trading?

In some instances, individuals exploit inside information, using it to either make a trade based on material information not available to the public or divulge inside details to friends and family members and use that information to make a profit through securities trading. Information is considered material when there is a substantial likelihood that a reasonable investor would consider such information important in making an investment decision. Any individual with access to this type of information could have a significant advantage and could potentially make larger, and thus unfair, profits than fellow investors.

Insider trading is a form of securities fraud, one of the most prevalent white-collar offenses in the United States. The Securities and Exchange Commission defines the practice as “buying or selling a security, in breach of a fiduciary duty or other relationship of trust and confidence, while in possession of material, non-public information about the security.”

The role of the Securities and Exchange Commission (SEC) in insider trading cases

Insider trading is a serious offense with criminal and civil repercussions. The SEC is the government body that enforces federal securities law (particularly the Securities Exchange Act of 1934 and the Securities Act of 1933) and has regulatory responsibility over all operating securities exchanges to promote fair market practices. The SEC monitors market movements, identifies potentially unlawful trades, and conducts insider trading and other fraud investigations. 

Not all trading by those with inside material information is illegal. For instance, the SEC and/or Justice Department may forgo action where an insider trade resulted pursuant to a binding contract or a written plan for the trading of securities (each a “trading arrangement” and collectively “trading arrangements”) adopted at a time that the trading person was not aware of material non-public information. 

Persons associated with any company who have access to insider information about that company may own and trade stocks as long as the relevant information has been made public and proper reporting and disclosure regulations were followed. Failing to do so may result in an insider trading investigation and charge. 

What are the sanctions for insider trading?

Sanctions for insider trading may be criminal, civil, or both. 

In the realm of criminal penalties, individuals found guilty of insider trading face up to $5,000,000 in fines and/or 20 years imprisonment, while corporations and other business entities convicted of insider trading are liable for a maximum fine of $25,000,000. In the area of civil law enforcement, prosecuted by the SEC, persons found to have violated insider trading laws may become subject to civil sanctions, including injunctions, and may be forced to disgorge any profits gained or losses avoided. The civil penalty for a violator may be an amount of up to three times the profit gained or loss avoided as a result of the violation or $1,000,000, whichever is larger.

What do you do if you’re involved in an insider trading charge?

If you, your loved one, or your company are in any way involved in an investigation of insider trading, your first course of action should be to contact a defense lawyer and get legal counsel. Your choice of counsel to represent you in an insider trading investigation can significantly impact your involvement and the result of the case. 

Serafini Law Office is your best choice for insider trading representation

Being charged with insider trading or even your involvement in an investigation is difficult and frightening. Serafini Law Office will provide you with the best representation possible.

Richard Serafini served as a senior litigator in the Criminal Division of the United States Department of Justice in Washington. Before that, he worked as a supervisor in the Enforcement Division of the Securities and Exchange Commission and as a civil enforcement attorney. This makes Mr. Serafini a uniquely qualified insider trading defense lawyer, particularly for cases involving SEC civil enforcement proceedings. He also has decades of experience as a private criminal defense attorney, particularly in white-collar crimes and federal insider trading defense. Moreover, he has represented numerous individuals and companies during investigations before the SEC’s Enforcement Division.  He will use his extensive experience to help you evaluate each detail of the case and craft the best possible response. 

The Serafini Law Office currently offers legal services in the areas of securities fraud and insider trading and does so throughout the United States. 

Contact us at (754) 223-4718 for a free and confidential consultation, and we’ll answer any questions you have about the case.

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