Insider Trading

Drug Crimes

Insider trading is a federal white-collar crime that involves the exchange or trading of a company’s stock information that is not yet available to the public. Insider trading is generally committed by stakeholders or employees of the company who are privy to material information when trading said company stock, thus gaining an unfair advantage over the average investor. Those accused of insider trading may face serious consequences.

The SEC (Securities and Exchange Commission) is authorized by the U.S. government to monitor the stock market for fraud or other illegal activities. Obviously, company employees, board members, and stakeholders can trade its stock, as long as that activity is reported to the SEC. However, when these corporate stakeholders possess information that could change the value of the stock, and they trade based on that material knowledge the general public is not privy to, that’s when insider trading becomes illegal. This kind of material or private information includes things like the hiring or removal of an officer of the company, a recently-secured major account, business plans/strategies, an impending acquisition, positive/negative earnings statement, etc. Sometimes, an individual breaches their fiduciary duty by disclosing a stock “tip” to another person, and in that case, both giver and receiver can be prosecuted.


Both civil and criminal penalties can be applied to those found guilty of insider trading. A defendant could face a federal prison sentence of up to 20 years. If there was a monetary gain resulting from the illegal trade, the defendant must pay triple that amount, in addition to fines and damages. However, one defense strategy is to show that an agreement for allowing future trading existed before the trading in question occurred. Another defense is to prove that the material information was indeed public knowledge at the time of the trade. If an individual committed insider trading based on an overheard tip, the tipper is not liable.
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As you can see, a savvy insider trading defense attorney has the expertise to make sure you’re not denied justice. If you or someone you know has been accused of insider trading, you’re in the right place, but you need to contact DRE Law right now. With locations in Beverly Hills, Orange County, and Las Vegas, their defense attorneys are experts at white-collar crimes and will do what it takes to get you the most favorable results.

Darren Richie