What is Insider Trading, and When is it Illegal?

A corporate insider is an individual who is an officer or employee of a publicly traded company who is aware of significant information which has yet to be released to the public that can influence the company’s stock price. Illegal insider trading is when a person has the privileged knowledge and uses it in an attempt to make a profit for themselves or others.

“Insiders” tend to be corporate executives, officers, directors, or major shareholders, though they may also include employees with access to non-public information.

One of the most notable cases of insider trading involved Martha Stewart. She sold 4,000 of her shares of a stock that her broker said was going to plummet. The day before the news broke, Stewart sold her shares and saved $45,000. Although she was cleared of the charges, she was eventually charged with four counts of obstruction of justice and lying to investigators. She was sentenced to five months of prison, five months of house arrest, and two years of probation.

An insider trading charge can happen to anyone who is active in the stock market and acts on advice given by others. Many people who commit the crime of insider trading don’t even realize what they’re doing is illegal. If a friend gives you a “stock tip” and it turns out they got the information from an insider source, you can be charged with the crime. Michael B. Cohen is always available to help if a charge of insider trading has been filed or if you believe you may be the target of an investigation.

Michael Cohen is an aggressive, experienced Fort Lauderdale insider trading lawyer who has vast experience in cases of securities fraud and all cases related to it as well as all other federal criminal charges. If you are accused or arrested for insider trading Mr. Cohen’s law office is the correct choice to fight these types of allegations. Call today at 954.928.0059.