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Insider trading: Be careful how you use confidential information

Publicly traded company employees have to uphold a certain standard when they are dealing with information that could be used to make decisions about the purchase or sale of stocks. It is possible that some people might be accused of insider trading if they act on confidential information.

One of the most famous insider trading cases is the one that led to Martha Stewart being classified as a felon. She spent time in federal prison over a conviction for insider trading. In short, she used information that was given to her that wasn't made public about ImClone to make decisions regarding stock trading.

Basically, the only information that you should use if you are trading stocks is what is available to the public. If there are things that you are privy to that others aren't, you can't use that information to govern your actions, and you can't share the information with others so they can make trades based on it.

There are very specific points that must be present if you are going to be convicted of insider trading. In some cases, the trading might not have been punishable. Still, it is always best to err on the side of caution if you have a fiduciary responsibility at a company that is publicly traded.

If you do face charges for this crime, you should know that you are looking at fines and possibly time in prison if you are convicted. There is also a possibility that you won't be able to hold an executive position at another publicly traded company. That's why it's important to seek experienced legal guidance.

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Attorney Warren Lindsey has been awarded the following credentials:

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