Insider Trading

Insider trading refers to the use of information or leads, by an individual or company, which has not been made public yet. Insiders use this information to trade the company’s stocks or bonds to make profits. This activity is prohibited by the law and is a punishable offence which includes a fine and sometimes jail time too.

What is Insider Trading?

Insider trading is the use of non-public information or leads by an individual or a company to gain profits from trading stocks or bonds. This is a punishable offence by law and the insider can get fined or sentenced to jail time. There are different ways through which an insider acquires the information. He/she might be an employee of the company and using confidential information for his profits. Sharing such non-public information to family members and friends is also considered to be part of insider trading and will result in strict action by the law. The information used should not be available to the public and should be ‘material’ (influence the investor’s decision). These conditions need to be fulfilled to count as an insider trade.

The confidential information or leads should be used for the company’s profit only. If there is evidence to suggest the insider made his profit through insider trading a related deal would be deemed void and disciplinary measures would be taken against the accused when found guilty.


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Common Defenses in Insider Trading Litigation

There is a wide interpretation of insider trading law. Therefore, there are several ways to defend against the same with meticulous planning and an apt response.
Some common defenses in insider trading are:

  • The information conveyed by the insider was of no use as the person on the receiving end already had the information. This is the most common defense used by numerous experienced litigators.
  • The information regarding the trade has already been passed to the public outside the company. This prevents any legal action to be taken against the insider.
  • Procuring a statement that the confidentiality status of the information or document was reasonably unknown to them at the time.
  • Claiming that the information used was produced by separate sources and had nothing to do with corporate material leads. This is another commonly used defense.
  • Proving that the trade was based entirely based on reasons other than the material information being talked about. This is an efficient way to defend against insider trading litigation.
  • The defendant can claim that the trade was made on the advice of counsel.
  • Rejecting the idea of using insider or material information for a trade or even possessing the same. This is a widely used defense by most law firms.
  • Convincing the authorities that the trade was for the profit of the company as well as the board. As soon as they believe that the transaction was for non-personal gain, the insider trading dispute will be resolved.
Contact Commercial Lawyers for Insider Trading Allegations in Perth

Contact Commercial Lawyers for Insider Trading Allegations in Perth

Insider trading lawyers at Commercial Lawyers Perth WA will advise you at every stage of the dispute. The depositions and procedures are time-consuming and exhausting to say the least. The assistance of a legal team will ease the process and the lawyer can take care of all the technicalities. Contact Commercial Lawyer for the best legal support and quick resolutions for insider trading allegations.

The lawyers are dedicated to finding solutions to all the issues and provide excellent output. Getting caught up in insider trading not only harms the deal at hand but also damages the name of the trader in the market. Decent legal advice will not only resolve the current disputes, but also help in preventing any future allegations.

Contact Commercial Lawyers for Insider Trading Allegations in Perth

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