How to avoid accidental insider trading

On Behalf of | May 2, 2023 | White Collar Crime

You may find it surprising to learn that you can commit white-collar crimes on accident, including insider trading. If you have accusations against you, it could be because you did not recognize that your actions broke any law. In some cases, you may not have broken the law, period. However, because insider trading laws are complex, you could still face charges when you believe in your innocence.

Insider trading laws are supposed to stop insiders from protecting their self-interests with private knowledge. To avoid accident insider training, you have to know how it happens in the first place.

Do not commit a breach of duty

Generally, insider trading harms public shareholders. For example, if corporate insiders or shareholders have inside knowledge about a deal going south and decide to sell their stocks before the market crashes without telling the public, then they committed a violation against those who have a stake in the company.

Be careful about what you share

If you work for a company or have insider knowledge, be careful with whom you share that information. For example, you may feel overjoyed about a business deal that occurred at work, but when you share it with friends and family before it becomes public knowledge, they could purchase or sell shares for personal gain.

While it is not common to face charges of insider trading as a member of the public, you should be wary of insider knowledge, even if you receive the information second or third-hand. If you know that most people do not, it is safer to ignore it.

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