by Brian Mahany
Insider trading cases have been quite the buzz on Wall Street in recent years. Several well known traders and hedge fund managers have gone to prison after being caught using inside information to trade securities. When an “insider” has access to information ahead of the market, they have an advantage that allows them to profit while other investors suffer.
The threat of jail is a powerful deterrent to keep most people from trading on inside information, however greed often overpowers common sense. The SEC announced earlier this month that it would compensate whistleblowers who provided information in SEC v Mark Anthony Longoria. That case involved insider trading charges against many individuals.
The bigger picture is SEC’s willingness to pay whistleblowers – usually insiders who report other insiders for doing something illegal or wrong.
In several of the well known insider trading cases, employees at technology or other companies “leaked” information about new products or earnings reports before that information was made public. They were paid or bribed by traders or hedge fund operators who in turn used the information to buy or sell stock in those companies in advance of the information becoming public. The insider made money. The trader made money. The losers, however, were common investors like you and me.
The FBI can investigate and put those breaking securities laws in jail but only when the crime is reported or discovered. That’s where whistleblowers are a big help. If someone you know is selling inside information or bragging on how they “made a killing” on the market using inside information, contact us. If your information leads to an award you may receive significant compensation.
The federal government and most states have powerful whistleblower protection and anti-retaliation laws that can often be brought to bear if the whistleblower is fired for coming forward.
Mahany & Ertl – America’s Fraud Lawyers. Offices in Milwaukee, Wisconsin; Detroit, Michigan; Portland, Maine & Minneapolis, Minnesota. Services available in many jurisdictions.