When the SEC launches an investigation into allegations of insider trading, its net can be widely cast. In many instances, not only are the managers and employees of brokerage firms found liable, non-employee investors are swept up, too. A Tampa Stock Fraud Lawyer can explain that there are protocols to employ that can act to proactively protect market participants from any hint of insider trading.
Double Check any Advice Received
Inevitably, most will receive a hot investment tip that demands immediate action to maximize profits. It almost seems too good to be true. In fact, it just may be. The best way to ensure any information you receive is not from an insider is to do a little research. If you cannot find the information cannot in a publicly-available news source, think very carefully before acting on it.
Be Careful of What You Ask
Understand from whom you are seeking advice. It is natural to look for information from someone who has integral knowledge of a company, and in fact, insider trading per se is not illegal. It can be legal if the insider trades with information that is available to the public.
Similarly, the use of information gleaned from an insider may not be improper, but a question may prompt the sharing of confidential information. Even if the intent was otherwise, merely asking the question can be perceived as insider trading.
Brokerage Firm Protocol
The government’s aggressive approach to insider trading makes it incumbent on a trading company to have a procedure in place to monitor its own brokers. The primary focus of many investigations is the relationships among brokers and suspicious trading activity between those who have some sort of connection. It is likely that most of these trades will prove legitimate, but having a system in place and showing a willingness to cooperate with any investigation will offer the firm some protection from prosecution, even if a particular employee is targeted.
Establish a policy for dealing with information of which all employees are acutely aware, and enforce the rules.
Contact a Securities Fraud Attorney in Tampa for Legal Advice
You may believe that having access to more and better information is the key to wise investing. It is important, however, to realize that sentiment may not be shared by the regulating bodies. For any questions regarding the propriety of securities trading methods, call a Tampa stock fraud lawyer with Savage, Combs & Villoch, PLLC at 813-200-0013.