Insider trading is a term that most investors have heard and usually associate with illegal conduct. But the term actually includes both legal and illegal conduct. Because of our wide-ranging experience with these cases, we had the extreme honor of filing an amicus brief in U.S. v. Rajaratnam, the largest insider trading case in American history.

The legal version is when corporate insiders — officers, directors and employees — buy and sell stock in their own companies. When corporate insiders trade in their own securities, they must report their trades to the SEC.

Illegal insider trading refers generally to buying or selling a security, in breach of a fiduciary duty or any other relationship of trust and confidence, while in possession of material, nonpublic information about the security. Insider trading violations may also include “tipping” such information, securities trading by the person “tipped,” and securities trading by those who misappropriate such information.

Common Sources Of Insider Trading Charges

The SEC and ultimately the U.S. Attorney can bring the following cases:

• Corporate officers, directors and employees who traded the corporation’s securities after learning of significant, confidential corporate developments;
• Friends, business associates, family members and other “tippees” of such officers, directors, and employees, who traded the securities after receiving such information;
• Employees of law, banking, brokerage and printing firms who were given such information to provide services to the corporation whose securities they traded;
• Government employees who learned of such information because of their employment by the government; and
• Other persons who misappropriated, and took advantage of, confidential information from their employers.

Keeping You Out Of Jail — And Your Name Out Of The Papers

At Varghese & Associates, P.C., we are no strangers to the news media. While we enjoy being trusted as experts by major news outlets, we know that most of our clients do not want their names — or their private business — in lights. As your defenders and advocates, we are committed to helping you get back to your life. Our experience in insider trading and other white collar criminal matters allows us to resolve our clients’ cases as seamlessly and quietly as possible.

To speak with one of our highly trusted defense attorneys in a free, confidential consultation, please contact us online or call our Wall Street office at 212-430-6469.