As we are aware, buying and selling stocks based on inside information which has not been disclosed to the public is illegal. However, there are different penalties for insider trading including a civil penalty or a criminal penalty. The civil penalty would only result in a fine, the criminal penalty would likely include a fine and jail time. The question a criminal defense lawyer may be asked is how a civil penalty or a criminal penalty would be determined in an insider trading case. From the outside looking in, it would appear that some of those who were accused of insider trading received only a civil penalty, while others served jail time for essentially committing the same crime.
There are some important factors which are used to determine the penalty for insider trading crimes. First, how significant is the issue of the specific insider trading case? This would include amounts of money lost or earned fraudulently, the number of people involved or affected and how long the insider trading practices took place. Second, there needs to be evidence of wrongdoing, and, more specifically, there needs to be a “corroboration of others to prove a criminal case.” Third, any other securities violations would be taken into consideration.
Once the Securities and Exchange Commission gets involved in an initial investigation for a potential insider trading case, the Department of Justice will have the opportunity to step in as well. Should the SEC feel that the case is fortified with enough information to lead to a criminal conviction, the DOJ could do its own investigation to be sure it leads to the same conclusion.
In addition to the SEC, the Financial Industry Regulatory Authority also gives the DOJ as heads-up on potential criminal cases. FIRNA is the largest independent regulator in the United States. They are looking for insider trading activities and they often make inquiries on trades that look suspicious. If their inquiries reveal wrongdoings, FIRNA will share their information with state or federal authorities.
White collar criminal defense attorneys know that FIRNA and the SEC are the two agencies that sniff out insider trading activities, then pass along their information to the FBI or state police. One attorney in New York stated that “those involved in insider trading cases that result in civil charges rarely offend again. Insider trading crimes are typically crimes of opportunity with a rational person making an irrational decision to act.”
Our Myrtle Beach criminal defense lawyer at The Mace Firm spends a significant amount of time in criminal courts throughout all over the United States. There are criminal lawyers all over the country, but few practice criminal defense in Charleston, Miami, Myrtle Beach, Pawleys Island, Surfside Beach, Columbia and several other areas.
If you or someone you know is facing federal criminal or state criminal charges, you will need to speak with an experienced Myrtle Beach criminal defense lawyer in your area. A federal criminal lawyer at The Mace Firm is ready to speak with you about your case. Call one of our federal criminal attorneys to schedule your free consultation.