A common assumption is that white collar crimes such as fraud, hacking and insider trading are relatively victimless crimes. This could not be further from the truth. White collar crimes can be financially devastating to those who have been defrauded or otherwise harmed by them. For this reason, police and prosecutors in Mississippi will treat white collar crimes just as seriously as they treat violent crimes. One common type of white collar crime that a person in Greenville could fall into is insider trading.
What is insider trading?
Did you get a great tip not known to the public about a company’s financial future? Did you use this information to make a trade? If so, you may have unwittingly committed insider trading. There are legal forms of insider trading and illegal forms of insider trading. Illegal insider trading takes place when material information about a company is not made public and the insider uses this information to buy or sell stock. Nonpublic information is material if it has a substantial impact on someone’s decision to trade stock. Illegal insider trading gives the insider an advantage that the general public is not privy to, which can cause great financial harm to shareholders. Insider trading that follows the U.S. Securities and Exchange Commission’s rules, however, can be legal.
An infamous example of insider trading: Martha Stewart
Nearly two decades ago in 2003, television personality Martha Stewart was accused of insider trading. The jury in her case found that Stewart sold almost 4,000 shares of a biopharmaceutical company’s stock after receiving information from a broker who told her that the CEO of the biopharmaceutical company sold all his shares in the company, which was not public information. After a 2004 trial, Stewart was ultimately convicted of obstruction, conspiracy and making false statements. Ultimately, she spent five months in a federal corrections facility for these crimes.
White collar crimes are complex
White collar crimes are often more difficult to understand than other crimes, due to their complex nature. A person could even commit a white collar crime without knowing they did something illegal. Thus, it is important that those facing white collar crime charges understand all their rights and options so they can develop a solid defense strategy.