Insider trading isn’t just one professional telling another about certain as-of-yet private information so that they can make a few sneaky trades or investments with an agreement that they will receive similar tips in the future.
It is often much simpler, often involving friends or family members. Financial professionals, lawyers, regulatory professionals and many others are occasionally privy to information that the general public does not have. They have an obligation to keep that information secret.
When people utilize non-public information for their own financial benefit or share it with others for the same purpose, they may open themselves up to the possibility of insider trading charges. The recent arrest of a former manager from a digital currency trading platform highlights how tech-savvy enforcement agencies have become when fighting insider trading.
Even alternative investments can lead to criminal charges
For years, digital assets have seems like a safe haven for those who don’t want government entities tracking their every financial move. However, digital assets now increase people’s tax liability and have become part of the mainstream financial conversation.
As such, the IRS is far from the only regulatory agency paying attention. The Securities and Exchange Commission has a vested interest in ensuring that traders and businesses managing digital assets comply with financial laws. As some former workers from a large digital trading platform recently learned, sharing information about digital assets can lead to charges just as easily as improperly sharing information about traditional financial transactions, like an upcoming business merger.
Even sharing information about uncommon financial resources with family members and friends could open an individual up to allegations of insider trading that could have career-ending consequences for the professionals involved. In this case, there are allegations that workers used information about what new digital currencies would be available on the platform for themselves and others to make profitable purchases.
Financial crimes often require complex defenses
Creating a reasonable doubt about a complicated financial crime like insider trading or similar white-Collar criminal offenses means that you will need to have a strong working knowledge of the evidence the prosecution has and also federal and state laws regulating financial transactions and your industry in particular.
Keeping an eye on federal financial cases can help you avoid making the sorts of mistakes that could lead to your prosecution for a white-collar criminal offense as well.