Insider trading in Miami is the selling of common shares or other securities based on secret knowledge about the security or the business that the public does not know about. Based on federal regulations provided by the Securities and Exchange Commission, when the purchase or sale was made, the words "on the basis of" implies that the individual making the transaction knew about the non-public details. In other words, a plaintiff or prosecutor should not prove that the individual was using the information; it is enough to provide the information.
The Securities and Exchange Commission is the primary government entity investigating cases of insider trading, as well as any other securities fraud-related crimes. Also, the major stock markets use self-regulatory bodies such as the Financial Industry Regulatory Authority (FINRA), which regulates the NASDAQ stock exchange, as well as other supervisory and compliance divisions, to track irregular trading trends that contradict predetermined criteria agreed by the exchanges during regular daily trading.
Such regulatory bodies track regularly the average volume of all stock and option transactions for each trading entity listed on its exchanges. When a big increase in average volume happens seemingly for no reason other than a few days later, or perhaps later the same day, a significant announcement is transmitted via the news media covering the financial markets, it may raise a red flag, setting the stage for an insider trading investigation by the SEC or either of these self-regulatory organizations.
"Insiders" are typically company executives, managers, directors, or major shareholders, while workers with access to non-public information can also be involved. Trades by these persons in the shares of their own company, based on details not available to the general public, are deemed fraudulent. This is because corporate managers, directors, and staff owe the shareholders fiduciary obligations to prioritize the interests of the shareholders. The "insider" has put his or her interests first by selling knowledge not widely available to the public at large, and that includes shareholders.
An example of insider trading deemed legal is if you were working for a publicly-traded corporation where there was talk that the company's earnings would beat expected expectations on Wall Street, but it was all speculation. Yet, if you had direct explicit knowledge from someone in the accounting department or a member of the board, or that the talk was true, and you then bought the stock of the company knowing that this information was factual prior to any public announcement being made, it would be considered an insider trade, a criminal act. After this information has been released, the stock will most likely go up in price, resulting in an investment that was not gained legally.
To prove a case of insider trading to the court, three requirements must be met. The first of these is proving that the accused purchased, sold, or shorted the stock or security in question. That is commonly referred to as possession. Second, there was material possession, meaning its disclosure would most likely affect the company's stock price before it became distributed publicly. The government's third criterion for making the case is that the knowledge was unquestionably non-public.
The penalties for Insider Trading in Florida can be as severe as up to 20 years in prison along with up to a $5,000,000 fine. If charged with Insider Trading, it's imperative that you contact our office immediately. The Law Offices of Mark Eiglarsh can assist you under these challenging circumstances.
Whether you're even ultimately arrested for the crime, you could suffer significant hardship, both personally and professionally from an investigation for Insider Trading. Law enforcement may zealously investigate: Your bank records; all your phone records; records of all of your trades; your personal calendars; all electronic communications, including text messages and emails etc.
The general information provided above about insider trading in Fort Lauderdale is meant for educational purposes only and is not a substitute for speaking directly with an attorney about the facts and circumstances of your case. Please call 954.500.0003 in Broward or 305.674.0003 in Miami to schedule a consultation with the Law Offices of Mark Eiglarsh.