William G. Yarborough

What makes insider trading illegal?

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Most people assume that insider trading is illegal, but there is a type that is actually legal. It’s important for South Carolina residents to understand the difference between legal and illegal insider trading to avoid problems with the law.

Legal insider trading

The definition of insider trading is the buying or selling of stocks based on material information that isn’t available to the public. When directors make decisions together on their company’s stock, they are technically insider trading, but it is the type that is legal. The catch is that the law requires them to disclose their decisions within a short period of time to the SEC and the public. In addition to disclosing stakes and transactions, companies must report changes in ownership.

To comply with this requirement, make sure to fill out SEC insider trading Form 4 within two days to report selling or buying company stock. SEC insider trading Form 3 is to report the initial stake in the company. You need to file Form 3 within 10 days of becoming an insider. Officers and directors are considered insiders.

Illegal insider trading

Illegal insider trading is a white-collar crime that law enforcement can arrest individuals for. Insider trading is illegal when you don’t follow the SEC’s rules in disclosing transactions, stakes and changes in ownership. It’s also against the law when you buy or sell stock based on the information you overheard that isn’t yet available to the public. Paying for insider information is also illegal. Law enforcement can prosecute individuals for these different types of insider trading.

Dirks test

The SEC uses the Dirks test to determine if a person is guilty of illegal insider trading. Two key criteria that the SEC investigates are whether the individual broke rules of confidentiality and whether they did so knowingly.

When you find out something important about a company’s financials that isn’t available to the public, you must avoid selling or buying its stock until the public also knows. It doesn’t matter if you accidentally came across the information or not; benefiting financially from it is still illegal insider trading. If you have questions about illegal insider trading, a criminal defense attorney may provide more information.

Frequently Asked Questions

How do I know if I need a lawyer?

If you have been charged with a crime, arrested, or under investigation then you need a lawyer.

When you’re charged with a crime, there may be potential penalties that you’re not aware of. But there are ways to defend against the charges, too. Your lawyer can strategize for your case. They can represent you in court and to the prosecutor, putting their expertise to work for you.

Even if the charges don’t seem significant now, they may affect you in the future. Your lawyer defends your freedom and your best interests. If you’re facing a criminal charge or police investigation, contact a criminal defense lawyer.

What steps should I take immediately to protect my rights?

If you’re arrested or charged with a crime, be polite – but don’t consent to any search. Politely say that you refuse to answer any questions. Don’t resist the law enforcement officer.

Exercise your right to remain silent. This includes law enforcement officers before and after the arrest. It also means not talking to others at the police station, your friends, extended family, and social media. The things you say can be used against you.

Ask to contact your lawyer. Then call us right away. We can represent you at your next court hearing. Save everything that you think may be relevant to the case.

How long will my case take?

Every case has a different timeline depending on the severity and facts of the case. Some criminal charges can be resolved in just a few weeks. Others can take several months.

As your lawyer, William G. Yarborough will help you balance the various factors. It can take time to build defenses and/or negotiate a favorable plea agreement. It may be worth it to wait to go to trial. Other times, it’s best to take a plea deal.

What’s right for you depends on multiple factors. Attorney Yarborough can advise you on what he thinks is your best course of action.

Will my case go to trial?

There may be non-trial options available to you. You may secure a plea bargain or a pre-trial case diversion. Sometimes, preliminary motions can result in charges being dismissed.

However, you always have the right to a trial. In a trial, the prosecutor must prove the charges against you beyond a reasonable doubt.

Most cases don’t end up going to trial. But what matters is your case. Attorney Yarborough will work with you on a personalized case plan that reflects your interests and goals.

If your case does go to trial, Attorney William G. Yarborough is prepared to aggressively defend you in court.

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If you need experienced criminal defense, do not hesitate to contact William G. Yarborough Attorney at Law. Call 864-808-6871 or complete the online contact form to schedule your free initial consultation.

I offer structured fee arrangements with negotiable fees based on your charge. My office is conveniently located in downtown Greenville.

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