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Insider Trading in Federal Financial Criminal Cases

Insider trading is the buying and selling of a public company's stock, bonds, or stock options by individuals who have access to material or nonpublic information about the company, which could include legal and illegal conduct. Insider information means someone gets that information before it becomes a matter of public record, and uses it to their advantage to gain profit or avoid loss.

Insider trading in Michigan federal financial criminal cases is prohibited by the U.S Securities and Exchange Commission (SEC) and could lead to several adverse consequences. By contacting an experienced federal financial crimes attorney, you could help to strengthen your case and defend your reputation.

How does the SEC Determine if Insider Trading Has Occurred?

To determine whether insider trading occurred, the SEC looks at the person's general history of trading on the market to see if the particular trade in question is compatible with their history. They may look at the individual's interactions with people in the corporation that may have known about the event to determine whether the individual was privy to any information.

The authorities may also investigate what the individual did with the stock after receiving the alleged information about the stock.

Difference Between Smart Trading and Insider Trading

In the stock market, there are prudent investors who may keep their finger on everything they invest in and could be aware of potential benefits or losses in specific stocks. Some people make these kinds of decisions and they are not involved in insider trading. If they are an astute investor who could explain why they made a decision to buy or sell a stock, the accusation of insider trading could be incorrect.

A person in this position may be called into the SEC to explain their actions, these defendants may want to be able to explain why they made a decision. If the SEC is unsatisfied that the individual's decision was based on the analysis of the event rather than inside information, they might charge them with a federal violation. A skilled federal financial crimes lawyer may be able to help protect someone who is dealing with a false claim, as well as defend their rights.

Common Examples of Insider Trading

Some situations of insider trading in Michigan federal financial criminal cases involve companies making an initial public offering (IPO) that may reveal information to a couple of associates about what they anticipate the IPO might show.

It is especially problematic if people have been accused of quickly investing in the company as a result of that information. If the stock goes up precipitously after that, they could be charged with offenses regarding their disclosure of information.

Issues Regarding Insider Trading in Financial Criminal Cases

Insider trading could be found to be an issue with smaller business starts ups. When preparing to make an IPO for a small business, a person may want to be sure to be completely comfortable that everything was done by the book and all internal rules were followed.

The individual may want to have a seasoned attorney to review their actions so they do not expose themselves to a problem in the future.

Role of a Michigan Federal Financial Crimes Attorney

The first thing a federal financial crimes lawyer may want to do to help someone accused of insider trading in Michigan federal financial criminal cases is to talk to the defendant about the financial transaction that is in question. The lawyer may begin to craft a defense to argue that the person acted appropriately.

This process could be beneficial before any financial decisions are even made as it allows the business owner to cover all their bases before going public on the stock market. By consulting with a skilled attorney, an individual could protect themselves from potential claims of federal financial criminal activity in their financial interactions.

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