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Criminal charges are pending for a former financial analyst

Sep 23, 2017 | White Collar Crimes |

A former employee of Amazon is being charged with illegal insider trading by the Securities and Exchange Commission . Financial analysts in the Tampa area should pay close attention to the case and the legal issues of disclosing nonpublic information to third parties.

The criminal charges stem from the ex-employee’s status as a financial analyst and the information received due to his position. The employee leaked first quarter 2015 earnings reports to a third party in exchange for a $10,000 payment. The third party allegedly used that information to trade company stock for a profit. It is alleged the third party profited more than $100,000 from the information. Another third party, who allegedly helped broker the trades, is also being charged.

There are a number of affirmative defenses to an insider trading charge, including whether the trader had a pre-adopted trading plan or whether the trade was initiated through a mathematical trading formula. In this case, one defendant seems to be arguing that the information wasn’t material, or at least was common knowledge.

As is seen in this case, a federal criminal charge of insider trading can be made against those who disseminate the information, those who receive the information, and those who broker transactions involving the information. Because of the complexity of SEC rules in this area, it is possible to be wrongfully charged or there may be viable defenses available. Because of the potential penalties involved, it is wise for defendants to choose an attorney experienced in federal criminal defense.

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