How to Defend Against Insider Trading Allegations: A Legal Strategy Guide for Executives
Insider trading allegations can destroy a career in a single headline. Whether you’ve received an SEC subpoena, a DOJ inquiry, or a call from your company’s legal team, it’s critical to act fast. LibertyBell Law Group defends executives, board members, and corporate insiders facing serious securities fraud claims.
What Is Insider Trading?
Insider trading occurs when someone buys or sells securities based on material, nonpublic information. While legal if done under proper disclosure (e.g., 10b5-1 plans), it becomes illegal when trades are made based on confidential data without public knowledge.
Examples of Insider Trading Allegations
- Buying or selling stock before a public merger or earnings report
- Tipping off friends, family, or colleagues about upcoming corporate events
- Trading through offshore or third-party accounts to avoid detection
- Receiving stock options and immediately exercising them based on internal knowledge
Common Targets of Insider Trading Investigations
- CEOs, CFOs, and financial officers
- Board members and corporate insiders
- IR and PR executives
- Employees with access to earnings, acquisitions, or regulatory updates
Signs You May Be Under Investigation
- Receiving an SEC subpoena or a Wells Notice
- Company counsel requests your trading history
- FBI or federal agents contact you for questioning
- Brokerage firms freeze or flag trading accounts
What to Do If You Suspect You’re Under Investigation
- Do not speak to investigators without an attorney
- Preserve all emails, texts, and trading records
- Do not delete, edit, or attempt to “clean” your devices
- Hire a white collar defense lawyer with SEC experience
Your Legal Rights in Insider Trading Cases
- The right to remain silent and avoid self-incrimination
- The right to legal representation during all interviews
- The right to challenge subpoenas or limit document requests
- The right to submit a defense via a Wells submission (pre-charge response)
How LibertyBell Law Group Builds a Strong Insider Trading Defense
- Immediate response to SEC or DOJ inquiries
- Forensic review of trades, communications, and timelines
- Challenging the “materiality” of information allegedly used
- Proving lack of intent or access to confidential data
- Negotiating non-prosecution agreements or early dismissals
Case Example: Executive Avoids SEC Charges
A senior biotech executive was accused of insider trading before a clinical trial announcement. Our team established that the executive had no knowledge of material results at the time of trading. The SEC dropped the case with no charges filed.
Potential Penalties for Insider Trading
- Federal criminal charges and prison (up to 20 years)
- Civil fines of up to three times the profit gained or loss avoided
- SEC enforcement actions and public sanctions
- Loss of professional licenses and future employment
Wells Notice: Your Opportunity to Fight Back
If you receive a Wells Notice, it means the SEC intends to file charges. You must respond with a strategic legal argument. Our firm prepares persuasive Wells submissions designed to stop enforcement before it starts.
Schedule a Free Insider Trading Defense Consultation
Time is critical. The earlier we get involved, the better your chances of avoiding charges and protecting your career. LibertyBell Law Group offers free, confidential consultations to executives facing insider trading investigations or enforcement.
Conclusion: Don’t Wait for the Headlines
Insider trading accusations don’t go away quietly. Defend yourself now — with aggressive legal representation that understands securities law and executive defense. Call LibertyBell Law Group today.