Understanding the Consequences of Insider Trading
Insider trading is when an individual uses non-public information to trade stocks. However, it can also be considered insider trading when you have access to confidential and material information about a company and trading its securities.
It’s not only wrong to take advantage of privileged access; it’s also illegal. Sure, you may temporarily profit as a result of engaging in insider trading, but the consequences aren’t worth taking the risk.
Which white-collar crimes involve insider trading?
If you’ve participated in insider trading, you are technically guilty of securities and commodities fraud, which is a white-collar crime. You could also face additional charges of conspiracy or wire fraud.
White collar crimes are non-violent felony charges that are usually committed for financial gains. Health care fraud, public corruption, and trafficking of drugs or humans are also considered white-collar crimes, but those offenses have little or nothing to do with insider trading.
Which industries commonly involve insider trading?
Although individuals of any occupation may commit commodities and securities fraud by acting as a participant in an insider trading scheme, this offense is most common among stockbrokers.
However, entire organizations have been known to be indicted for insider trading. These organizations are typically brokerage firms, investment banks, and other corporations. If your company has engaged in securities and commodities fraud, you could face serious charges for any involvement in their scheme.
What are the consequences of insider trading?
First of all, your entire reputation will be on the line, and a conviction of insider trading can destroy your career. But you also need to worry about possible prison time, fines, and restitution.
If you’re convicted of insider trading as an individual, you can face up to $5 million in fines and a maximum 20-year prison sentence. Business entities that are found guilty of insider trading face up to $25 million in fines and participants in the scheme can also be sentenced to 20 years behind bars.
Even worse, you and/or members of your corporation may be sentenced to both fines and imprisonment.
How can a criminal defense attorney help?
Fortunately, there are a few valid defenses to an insider trading case.
Possible defenses include having participated in a perfectly legal inside trade, the exchanged information having been public or non-material, you didn’t have knowledge of insider trading going on within your company, or your actions didn’t rise to the level of criminal culpability.
If you’ve been charged with a white-collar crime related to insider trading, a white-collar crime attorney in Philadelphia can help you to build a defense, so you can win your case and be able to move forward with your life.