There are many ways for those who run businesses to abuse their power. In some cases, they seek to enrich themselves through insider trading. When people talk about insider trading, the focus is often on moves made for personal profit.
Executives and others with non-public information about business operations sometimes use that knowledge for personal gain. They purchase certain stock or liquidate investment holdings because they know about upcoming changes within a company or a planned merger.
Insider trading is a crime. Executives and others with access to private company information need to be cautious when talking about business operations, as they don’t need to directly profit from insider trading to face prosecution.
Sharing information can lead to charges
Business leaders who blatantly misuse their positions for personal gain are vulnerable to prosecution. So are others who may have opportunistic people in their inner circles.
Many cases of insider trading do not involve executives conducting transactions on their own behalf. Instead, regulatory officials become aware of their friends, family members or business acquaintances making trades at suspicious times. When people share insider information about company operations with others, they may give those outside parties an opportunity to conduct inappropriate trades.
The professional who disclosed information could be at risk of criminal charges even though they may not have received any personal profit from the transaction that occurred. Accusations of insider trading can lead to incarceration, financial consequences and a damaged professional reputation.
Even professionals who never use their insider knowledge for personal gain could be at risk of prosecution if they share information with the wrong people. Responding aggressively to white-collar criminal charges can help business professionals preserve their reputations and their freedom.
