Federal Insider Trading and Stock Market Irregularities
Typically, where you're going to see insider trading being prosecuted as a federal crime inside the Federal Court usually in downtown Los Angeles. This has to do with somebody having some information that no one in the public has and then using that information or giving that information to somebody else so that person can make a profit by buying stocks.
If you're doing this, then obviously somebody's going to be out money and somebody is going to be taken advantage of, so you're not allowed to use this inside information that you might have in order to benefit in any way. Some people think somehow, they can clean themselves from the insider trader aspect of giving this information if they give it to somebody else, and that other person uses it and maybe gives them a kick-back or a piece of the action.
Conspiracy to Commit Insider Trading
This would basically be a conspiracy to commit insider trading and would be prosecuted by the federal government, typically, Securities and Exchange Commission gets involved or the SEC, and what they're looking at is somebody who somehow gets some information related to a stock and then uses that information or gives that information to somebody else so that person can make money.
The government is not going to allow that to happen, because they're the ones that oversee this insider trading aspect of the Stock Market.
So, if you're charged with this insider trading crime, and you're looking at time in custody, you're going to want to look at how much is the alleged loss? What was your role in acquiring the information? In other words, how did you acquire it?
Who did you acquire it from? And one of the biggest things, again, is how much money you or someone else gained by utilizing this insider information? In the federal government, there's a whole structure as far as federal sentencing guidelines go where they're going to look at exactly what charges you're culpable of and then they're going to go next to how much money you obtained. Howe much loss was there?
Factors for Sentencing
That's going to dictate kind of what range you're in as far as the sentence, and then obviously, a bunch of other factors will apply depending on the circumstances of the case. The judge will take into consideration your attorney's arguments, their position paper regarding a federal sentence.
They'll also look at the probation department and see what they have to say about you, your background and your history and what they think about the crime, and then lastly, they're going to listen to the prosecutors to see what they have to say about it – what their position is – and then the judge will make the final decision.
So, in any federal case – whether it be an insider trading case or otherwise – the judge usually asks people at the time of the plea, has anybody promised you a sentence in this federal case? And of course, the answer has to be no, because no one can promise a specific sentence in a federal case.
Basically, what you're doing is you're pleading to a base offense and then there might be some other characteristics to that offense that apply enhancements, other things, accepting responsibility and ultimately, the judge is going to be left with you inside of a range, and then based on that range, based on your history, based on all the reports the judge reviews, and based on the judge's take and view of what you did, what you gained, how sophisticated you were and what the appropriate punishment is, the judge will then dole out the sentence to you.
Contact Our Federal Lawyers for Help
Obviously, you want to be prepared long before this if you're involved in an insider trading case in Los Angeles or anywhere in the county, make sure that you have fully exhausted all possible defenses. Once you've done, if you've made the decision that it's in your best interest to work out a plea agreement with the government, obviously you're going to sit down with your attorney and start to make the right decisions related to what you can do in your case and what makes the most sense.