When someone obtains non-public information about a company and acts on it for personal gain it’s considered insider trading. If you are facing an indictment on insider trading charges in New Jersey, it’s in your best interest to enlist the help of a determined Bergen County Criminal Defense Attorney who can help shield you from an uncertain future. Please continue reading to learn the penalties for insider trading in New Jersey.
What is Insider Trading?
Insider trading refers to the illegal buying or selling of a company’s stocks by individuals who have access to material, non-public information about the company. This information often significantly affects the value of the company’s securities. While some forms of insider transactions are perfectly legal, others can lead to serious criminal penalties. The complexities surrounding insider trading have made it a contentious issue in financial markets. As such, those found guilty of this crime in New Jersey can face both civil and criminal charges.
What Are the Potential Penalties?
Generally, an insider trading indictment alleges that an individual has traded stocks or securities based on inside information or provided inside information to another individual who traded on that information. It’s important to note that these laws are also applicable to those outside of the business who act on insider tips that influence a company’s publicly traded stock price. That said, the penalties for insider trading can include:
- Fines: The maximum fine for securities fraud is $5 million and the maximum fine for securities fraud conspiracy is $250,000.
- Prison. The maximum penalty for securities fraud is 20 years of imprisonment and the maximum penalty for securities fraud conspiracy is five years of imprisonment.
In addition to these penalties, a defendant may be required to disgorge profits made from insider trading and have to pay a civil penalty. The defendant may also be banned from serving as an officer or director of a public company for some time.
What Are Common Defenses Against Insider Trading Charges?
If you have been accused of insider trading, it’s in your best interest to enlist the help of a skilled criminal defense attorney who can assess your case and formulate a robust defense strategy. Depending on the unique circumstances of your case, an attorney may be able to raise a company’s Rule 10b5-1 plan as an affirmative defense as long as the plan was written in good faith and meets rule requirements.
In addition, they may be able to assert a Mosaic theory defense which establishes that a securities transaction was based on a variety of information obtained legally from multiple sources over time rather than from a single disclosure of insider information. Furthermore, they can raise a good faith reliance defense which relies on a defendant having discussed a pending transaction with their attorney and then having executed it based on their attorney’s advice. This defense must demonstrate the defendant disclosed all relevant facts and circumstances about the planned transaction to the attorney, received legal advice, and then acted upon it.
When faced with criminal charges for insider trading in New Jersey, it’s in your best interest to engage a seasoned criminal defense attorney from The Law Office of Carl Spector, who can help protect your rights and fight for the best possible conclusion. Connect with our firm today to discuss your case.
