Maybe your friend told you of their plans to invest in a certain stock and you followed suit. Perhaps your spouse took advantage of some knowledge they gained at work to make some money for the new house.
Honestly, it’s easy to partake in insider trading and not even know it.
Defining insider trading: what’s legal and what’s not
Insider trading is trading stocks based on confidential company data and profiting from the result. The pool of people who could profit from insider training is broad and vaguely defined. You could be a corporate employee or the company delivery man’s wife and be liable for insider trading if you hear something and act on it. This practice is actually still legal if you report the trade to the Securities and Exchange Commission. However, if you do not report insider trading to the commission, you could be accused of illegal insider trading, which can have incredibly serious consequences.
The potential penalties
An insider trading charge can have a wide range of penalties, from a fine to prison time. It depends if you are charged with a civil or criminal violation. This will depend on several factors, including the amount of money involved, the evidence collected against you and whether or not you are a repeat offender.
What are your next steps
As a person of interest in a civil or criminal case, it’s important to know your rights. It’s best to speak to an attorney before making any comments to the police, which will be on record.