When you are accused of insider trading, it is not the time to try out a new attorney, or to contact your sister's divorce attorney for help. The SEC is serious about insider trading, and if they are looking at your innocent trades, you need to be able to respond in an intelligent, well thought out manner.
This week the chief of the market abuse unit at the SEC acknowledged that the Commission is taking a trader-based approach to surveillance. “The way is to turn the approach upside down in a way that would reveal relationships,” Hawke said, adding that they look at the relationships and investments of traders.
He said new database software has helped the agency find connections between people. While that is all well and good, the farther out that software takes relationships, the more false positives it is going to find. When it starts linking your trades to Kevin Bacon's trades it will have gone too far. However, at the 3rd and 4th degree of separation, we are going to see more innocent investors caught up in insider trading investigations.
For more information - SEC turning insider trading fight ‘upside down"
--- The attorneys at Sallah Astarita & Cox include veteran securities litigators and former SEC Enforcement Attorneys. We have decades of experience in securities litigation matters, including the defense of insider trading investigations and trials. Call us before you speak to the SEC investigator or the FBI agent. Do not wait for the Wells Notice, since that is when they have decided to charge you with a violation. For more information call 212-509-6544 or send an email.
