Federal and California State laws reflect that the stock market and a company's stock value may fluctuate, sometimes to a great extent, from one day to the next. While changes in the stock market may result from various factors, specific unlawful market practices, like insider trading, would provide specific individuals with knowledge of a clear advantage over the wider public. Unlawful insider trading is a federally prosecuted white-collar crime for which a conviction carries harsh criminal and civil penalties.
Our California insider trading lawyers have substantial white-collar criminal and civil defense experience at the Aron Law Firm, effectively representing countless clients in Santa Barbara and the surrounding California areas. If you're accused of or suspect you are under investigation for insider trading, get in touch with our criminal defense firm in Santa Barbara. Our skilled legal professionals are prepared to protect your rights and build a robust defense against insider trading and any white-collar criminal charges you face.
What Is Insider Trading?
To prevent unethical market practices, the United States government formed the Securities and Exchange Commission (SEC) in 1934. The SEC takes part in market surveillance to deter unlawful practices from occurring.
One of the SEC's main priorities is to investigate insider trading. While certain types of insider trading are legal, it becomes illegal when “insiders” within a corporation, like corporate directors or major shareholders, trade securities in such a manner that violates their relationship of trust while also having material information unknown to the general public.
Material & Nonpublic Information
The SEC does not define what “material information” entails. Still, it is generally regarded as any information particular to a company that an investor would find important when considering buying or selling stock. That may include a variety of items, such as:
- Acquisitions or divestiture
- Business developments
- Economic results that differ from current outlooks
- Security-related items like an increase or decrease in dividend
- Stock splits and buybacks
- Winning or losing a significant contract or customer
Information unknown to the general public refers to information that has not yet been released to the investing public.
What Are Common Cases Involving Unlawful Insider Trading in California?
The SEC has prosecuted insider trading cases against countless parties in California and across the United States. Some of the most common examples of these case include:
- Directors, corporate officers, and employees who traded the corporation's securities after discovering confidential corporate information
- Friends, family members, business associates, and other individuals who have been “tipped” by corporate insiders and traded securities after having received such information
- Employees of service firms, like banking, brokerage, law, and printing companies who came upon the material, nonpublic information on companies and traded on it
- Government employees who obtained inside, confidential information because of their employment and traded based on that knowledge
Prosecution of Insider Trading Charges in California Courts
If you're charged with committing unlawful insider trading in California, the prosecution must prove the following four elements beyond a reasonable doubt to gain a conviction:
- You bought or sold a security
- You acquired confidential information
- The information was not known to the public
- The information was material
A skilled insider trading attorney with experience defending clients in these white-collar criminal cases will be your most potent ally in refuting the prosecutor's claims that you committed these acts. If you're under investigation for illegal insider trading, contact the Aron Law Firm to learn how we may help.
What Are the Consequences of Being Convicted of Insider Trading in California?
Federal courts take a harsh stance against insider trading, imposing strict penalties with steep fines. If you're found guilty of conducting illegal insider trading in California, you may face the following penalties:
- A prison sentence of up to 20 years
- Fines up to $5 million for individuals
- Fines up to $25 million for organizations
Note that these penalties may be elevated when insider trading charges are accompanied by allegations of other white-collar crimes, such as fraud and bribery. Additional charges may increase both fines and the length of a prison sentence.
Defending against Unlawful Insider Trading Charges in California
While being confronted with federal charges for insider trading may be worrying, defense lawyers at the Aron Law Firm have effectively raised the following defenses on behalf of our clients in Santa Barbara and across California:
- You participated in legal insider trading
- The data you utilized was not material information
- The information you used was known to the public
- You did not have “purposeful” or culpable intent to violate securities law
- You did not know about an illegal insider trading activity
Contact a Skilled California Insider Trading Lawyer in Santa Barbara
Unlawful insider trading is a serious federal crime that may result in severe penalties, which necessitate a knowledgeable and experienced criminal defense lawyer to achieve the best possible result. The Aron Law Firm's California insider trading defense lawyers are highly skilled in representing defendants accused of white-collar crimes. Headed by former Deputy District Attorney William M. Aron, our firm applies years of trial experience, creating strategic defenses based on the facts surrounding our clients' cases in Santa Barbara and across the State of California.
Do not delay consulting a knowledgeable criminal defense attorney regarding your insider trading charges. Our California insider trading lawyers are prepared to listen to your side of the story and investigate your case in detail to develop a robust defense against the charges you face. To talk to our seasoned California insider trading defense lawyers about your situation, schedule a case review today by calling (805) 618-1768 completing our contact form.