GA Insider Trading Defense Lawyer
The world of finance is a world of gray areas. Trading on the stock exchange is so full of speculation and risk that sometimes it is hard to find the line between legal stock market investing and illegal gambling. The factor that determines what is legal on the stock market and what is illegal is not risk, though; it is fairness. It is legal to make risky investments, but the law requires you to do this on a level playing field. Everyone who buys publicly traded stock should be basing their decisions on the same publicly available information. The people who win on the stock market should be those who make the best guesses about the appreciation in the value of a certain company’s shares. In other words, insider trading is a crime because it is cheating. If you are facing charges for insider trading or another financial crime, contact the Norcross, Georgia white collar crimes defense lawyers at Zimmerman & Associates.
What is Insider Trading?
Who you know is very important in business, but when it comes to buying and selling stock, everyone should be acting based on the same knowledge. To put it another way, keeping secrets is also an important part of business; businesses have the right to protect trade secrets through nondisclosure agreements and can even sue people who share confidential information about a business, but you cannot use your knowledge of a company’s secrets (such as its plans for an upcoming merger or game-changing product launch) to inform your stock market investing decisions.
If you use your insider knowledge of a company’s impending successes or failures (as opposed to the guesses you make based on published information about the company’s performance), you can be charged with insider trading. In most cases, cheating at a game is not a crime, but stock market investing is not a game. By engaging in insider trading, you are unfairly depriving the investors who made their decisions based on publicly available information only.
Penalties for Insider Trading
Insider trading is not merely a violation of policy; it is a felony. A person who is convicted of insider trading can get a prison sentence of up to 20 years and a fine of up to $5,000,000. If a company is found to have engaged in insider trading, it can be required to pay a fine of up to $25,000,000.
Defenses to Charges of Insider Trading
If you plead not guilty to insider trading, the jury cannot convict you unless the prosecution convinces them beyond a reasonable doubt that you are guilty. You might be able to argue that, even if some people at your workplace knew the insider information, you did not know this information until after you made the stock market transaction. You might also argue that someone else (such as your spouse or stockbroker) made the transaction without your knowledge, so even if you knew the information, it did not directly influence your decision to make the stock market transaction.