New York City Criminal Defense: Insider Trading Attorney
Last updated on June 25, 2025
Any sort of allegation of insider trading can be devastating to you, your business and your stakeholders. Accusations of insider trading can threaten your career, your company and your future. At The Janey Law Firm P.C., we understand the gravity of these accusations. Insider trading attorney Derrelle Janey has dedicated his career to representing C-suite executives and stakeholders in complex white collar crime cases, and other high-stakes and high-profile litigation scenarios.
Our firm focuses on complex, high-conflict litigation and criminal defense for white collar crimes. We provide sophisticated, insightful representation to decision-makers and high-level executives facing serious charges.
Understanding Allegations Of Insider Trading
Accusations of insider trading allege that material nonpublic information (MNPI) about a company was used to buy or sell a company’s stock or other securities. This is a serious violation of securities laws because it gives the trader an unfair advantage over other investors who do not have access to the same information.
Insider trading does not always involve traditional employees; constructive insiders can also be accused of insider trading. A “constructive insider” is someone who isn’t a traditional employee but gains access to confidential information due to a special relationship with the company. For example, an attorney or consultant could be considered a constructive insider and prohibited from trading on MNPI.
Both state and federal authorities can bring insider trading charges. Federal charges, however, tend to be more serious, carrying steeper penalties and longer potential prison sentences. Federal crimes for insider trading are investigated by the Securities and Exchange Commission (SEC) and the Department of Justice (DOJ). DOJ prosecutions often follow SEC investigations, sometimes leading to parallel proceedings where you face both civil and criminal charges.
Understanding MNPI
MNPI is any confidential information that could affect an investor’s decision to buy or sell a security if they knew about it. Examples can include:
- Upcoming mergers and acquisitions
- Significant financial results not yet released
- Major product developments or setbacks
- Changes in key leadership
“Nonpublic” means the information has not been disclosed to the general investing public.
What Are The Defenses For Allegations Of Insider Trading?
A strong defense against insider trading allegations requires a careful examination of the facts and a deep understanding of securities law. Common defenses include:
- Lack of MNPI: It is possible to argue that the information used for trading was not material or was already public knowledge.
- No intent to defraud: Demonstrating that you did not intentionally use inside information for personal gain is a defense to insider trading accusations.
- Independent information: Sometimes, a defendant can prove that the information was obtained through their own research and analysis.
- Good faith: Showing that you acted in good faith and believed that your actions were legal and compliant with securities laws.
- Lack of knowledge: You can argue that you were unaware that the information was nonpublic or that it was illegal to trade on it.
- Compliance with insider trading policies: Demonstrating that you followed your company’s compliance programs, insider trading policies, trading restrictions, disclosure requirements, trading windows, blackout periods and preclearance procedures is a defense to insider trading accusations.
An insider trading attorney who has experience preparing a robust white collar criminal defense strategy for accusations of insider trading can assess the facts of your situation and help you better understand your possible defenses.
Penalties For An Insider Trading Conviction
The penalties for insider trading can be severe. The Securities Exchange Act of 1934 makes insider trading illegal and sets forth penalties for insider trading. According to the SEC, consequences may include:
- Disgorgement: Returning any profits gained from the illegal trading.
- Civil penalties: Fines of up to three times the profit gained or loss avoided.
- Criminal penalties: Significant fines and prison sentences.
In addition to these penalties, you may also be subject to financial restitution and other sanctions.
Can You Be Charged With A Crime If You Shared Information But Didn’t Trade Yourself?
It is important to know that you can be charged with a crime even if you didn’t trade yourself. This is known as “tipping.” If you share material nonpublic information with someone who then trades on it, you can be held liable as well. The government may pursue DOJ prosecutions against you.
How Should Executives Respond To An SEC Investigation Into Suspected Insider Trading?
If the SEC contacts you regarding an investigation and suspected stock fraud or securities fraud, it is critical to take the matter seriously. Immediately seek guidance from a securities law attorney with experience in SEC insider trading defense and securities enforcement defense. It is important to preserve all documents and communications related to the matter. In addition, always be honest and forthright in your communications with the SEC and your legal counsel.
Consult A New York Insider Trading Attorney
At The Janey Law Firm P.C., we offer initial consultations to discuss your situation, answer your questions and explore potential defenses. Our insider trading attorney is available by appointment for consultations. To schedule an appointment, you can send us an inquiry through our website or call our office at 646-289-5276. All inquiries are strictly confidential.