How To Defend Yourself From Accusations Of Insider Trading

If you have been accused of insider trading, you may be found guilty of securities fraud. This is a situation in which you are aware of the financial state of your business and do not honestly report your company's financial situation to your shareholders. This is done to encourage others to purchase stock in an unhealthy company that they would otherwise not purchase. This would help drive up the value of your shares. You would then use this insider information to determine whether you should buy or sell your shares.

Notifying The Board And Reporting To Securities Regulators

If you notice that your company is facing financial trouble, the proper response is to immediately notify the Board of Directors. Another way to protect yourself from the accusation of insider trading is to buy or sell stock while correctly reporting these actions to securities regulators. Securities fraud not only extends to yourself, but is also applied to any friends or family members who buy or sell based on insider information that you provide.

Establishing That You Weren't Informed Enough To Engage In Insider Trading

To be found guilty of insider trading, it must be proven that you had information that other investors would need to make sound investment decisions. Therefore, if you can demonstrate that you were not actually informed, such as if an accountant has been reporting erroneous financial information to you out of incompetence, this can be used to have insider trading charges dropped or reduced.

When insider trading is suspected, a complaint is filed to the Securities and Exchange Commission. This organization is given the power to act much more quickly than other agencies and might freeze assets to prevent a crime from taking place. Also, through the course of the investigation, if the Securities and Exchange Commission suspects that you have committed a crime, the organization may proceed with your prosecution.

Contacting A Criminal Defense Attorney

One situation is when a superior threatens to fire you if you do not assist him or her in participating in securities fraud. If you do not comply with your employer, you may risk losing your job. However, choosing to comply can lead to a much more serious consequence, such as over a decade in prison. If you find yourself in this situation, the best response is to contact a criminal defense attorney who is specialized in securities fraud. He or she will search for evidence that can be used to establish that you did not deliberately engage in insider trading. Visit for more information.