When most people think of a criminal offense they tend to envision a crime that includes violence, or the threat of violence. While there are certainly no shortage of violence criminal offenses in Nebraska, there are also a number of non-violent criminal offenses collectively referred to as “white collar crimes.” Contrary to what many people believe, white collar crimes are serious crimes that can result in lengthy prison terms if convicted. Insider trading is among those “white collar crimes.” If you, or someone close to you, has been charged with insider trading you should have at least a general idea of what insider trading is.
When you hear the term “insider trading” you probably think of either a Hollywood blockbuster movie or a sensational news story about a Wall Street tycoon who got greedy and wound up under arrest. The reality is that insider trading is not always that glamorous or sensational, nor does it always happen at such a grand level. In fact, insider trading occurs far more often than most people realize – sometimes without the participants even realizing they are committing a criminal offense. More importantly, not all insider trading is illegal.
Insider trading refers to stock transactions – buying or selling – by corporate insiders. For example, if an officer on the Board of Directors of Company XYZ buy stock in Company XYZ because he knows that the company is getting ready to merge with another company in the near future that would be considered insider trading. Obviously, the officer has “insider” information about the company that the general public does not have. More importantly, that information gives the officer an advantage when deciding to buy or sell company stock. If the officer follows all the rules, such as reporting the transaction to the Securities and Exchange Commission (SEC) within the time frame allowed by law, the trade is legal. In addition, for the trade to be legal, that same information must be made public.
If a company officer or employee uses insider information to buy or sell stock in the company and fails to abide by the rules and/or the information is not made public, that is illegal insider trading. For example, assume that the same officer from Company XYZ learns that his company may be facing very expensive liability for a defective product it manufactured and the officer decides to sell all his company stock before the information about the defective product becomes public knowledge that would be illegal insider trading.
The line between legal and illegal insider trading can often be difficult to draw. If you are concerned that you, or someone you love, could be facing charges for insider trading, it is best to consult with an experienced Nebraska criminal defense attorney right away. Contact Petersen Criminal Defense Law 24 hours a day at 402-509-8070 to discuss your case with an experienced criminal defense attorney.