Navigating Insider Trading Allegations: Your Legal Options

In the high-stakes world of finance and business, insider trading allegations can cast a long shadow over your career and reputation. These allegations can arise from seemingly innocuous actions, and the consequences can be severe, including hefty fines, imprisonment, and lasting damage to your professional standing. If you find yourself facing such accusations, it’s crucial to understand your legal options and secure experienced representation to protect your rights.

SKT Law is based in Orange County, CA, and serves clients across the United States and internationally. SKT Law provides unparalleled counsel for those facing white-collar charges like insider trading, and the firm is well-versed in navigating the complexities of these cases and restoring clients toward a normal life.

Understanding Insider Trading

Insider trading generally refers to buying or selling a security, in breach of a fiduciary duty or other relationship of trust and confidence, on the basis of material nonpublic information about the security. This means that someone with access to confidential information uses that information to their advantage in the stock market, giving them an unfair edge over other investors.  

“Insider trading is a serious offense that can have devastating consequences,” says Eliot Krieger, co-founder and managing partner of SKT Law. “It’s essential to understand the nuances of insider trading law and to mount a vigorous defense if you’re accused.”

Key Elements of Insider Trading

To prove insider trading, the prosecution must establish several key elements:

  • Material Nonpublic Information: The information used must be significant enough to influence an investor’s decision to buy or sell a security, and it must not be available to the general public.
  • Breach of Fiduciary Duty: The person trading on the information must have a duty to keep the information confidential. This duty can arise from a variety of relationships, such as an officer, director, or employee of a company, or someone who has received the information from one of those individuals.
    Intent to Defraud: The person trading on the information must have intended to deceive or defraud investors.  

Defending Against Insider Trading Allegations

Defending against insider trading allegations requires a comprehensive and strategic approach. Here are some common defense strategies:

  • Lack of Material Nonpublic Information: One defense is to argue that the information used was not material or was already public knowledge.
  • No Breach of Duty: Another defense is to argue that there was no fiduciary duty or other relationship of trust and confidence that was breached.
  • Lack of Intent: A defendant may argue that they did not intend to defraud investors or that they did not know the information was nonpublic.
  • Good Faith Defense: If the defendant acted in good faith and believed their trading was legal, this can be a mitigating factor.
  • Challenging the Evidence: A skilled attorney can challenge the evidence presented by the prosecution, such as the reliability of witnesses or the accuracy of trading records.

“A strong defense in an insider trading case requires a deep understanding of securities law, financial markets, and the specific facts of the case,” says Krieger. “It’s crucial to work with an experienced attorney who can develop a tailored defense strategy.”

The Role of an Experienced Attorney

If you are facing insider trading allegations, it is essential to seek the assistance of an experienced attorney as soon as possible. An attorney can:

  • Investigate the Allegations: An attorney can conduct a thorough investigation to gather evidence and identify potential defenses.
  • Protect Your Rights: An attorney can ensure that your rights are protected throughout the legal process.
  • Negotiate with Prosecutors: An attorney can negotiate with prosecutors to seek a favorable resolution, such as reduced charges or a plea agreement.
  • Represent You in Court: If the case goes to trial, an attorney can provide skilled representation in the courtroom.

Eliot Krieger, a former Department of Justice prosecutor and longtime defense attorney, has extensive experience in handling complex white-collar crime cases, including insider trading. His experience gives him unique insights into cases from the perspective of both law enforcement and a defense attorney.

“Having a former prosecutor on your defense team can be a significant advantage,” says Krieger. “It provides a deeper understanding of the prosecution’s strategies and tactics, which can be invaluable in building a strong defense.”

Consequences of Insider Trading Convictions

The consequences of an insider trading conviction can be severe. Criminal penalties may include imprisonment, fines and forfeiture. In addition to criminal penalties, defendants may also face civil penalties imposed by the Securities and Exchange Commission (SEC), such as disgorgement of profits, civil fines, and injunctions.

Beyond the legal penalties, an insider trading conviction can have a devastating impact on a person’s career and reputation. It can lead to job loss, professional licensing issues, and damage to one’s personal and professional relationships.

Protecting Your Future

Facing insider trading allegations can be a daunting experience. It’s crucial to remember that you have legal options and that a strong defense can make a significant difference in the outcome of your case.

“If you’re accused of insider trading, it’s important to take immediate action to protect your rights and your future,” says Krieger. “Don’t hesitate to seek experienced legal counsel who can guide you through the process and provide a vigorous defense.”

SKT Law is committed to providing clients with the highest level of legal representation in insider trading cases. With a deep understanding of securities law and a proven track record of success, the firm can help you navigate the complexities of your case and work towards the best possible outcome.

Contact SKT Law today if you are facing charges and seeking legal protection for unique challenges.