Insider Trading Whistleblower Attorney

Insider trading is the illegal practice of trading a public company’s stocks or other securities based on information that is not publicly known. Not only does insider trading break the law, it gives certain well-placed individuals an unfair advantage in the market that allows them to commit financial fraud and profit at the expense of investors. This distorts and undermines public trust in the markets, as well as the economy more generally.

To combat this problem, the U.S. Securities and Exchange Commission (SEC) offers financial rewards to individuals with valuable information that allows the government to prosecute and impose civil penalties upon those who are guilty of insider trading. If you have evidence that a corporate executive or other leader is abusing their position and committing securities fraud to profit by trading on non-public information, you may qualify for a reward. The whistleblower attorneys of Oberheiden P.C. can help you make the strongest False Claims Act case possible for the highest reward available. Contact our SEC whistleblower law firm today.

What Qualifies As Insider Trading?

The term “insider trading” has received press over the last several years, as various individuals have been prosecuted for using confidential information to reap rewards by executing advantageous stock and securities transactions. To understand whether you have evidence that someone is doing this, you should understand how the government defines it.

According to the SEC, an “insider” is “an officer, director, 10% stockholder and anyone who possesses inside information because of his or her relationship with the Company or with an officer, director or principal stockholder of the Company.” Insider trading occurs when such a person buys or sells a security in breach of a fiduciary duty or some other relationship of trust or confidence, and the transaction is based on material, nonpublic information about the security.

A common example of insider trading can help clarify the definition. A corporate officer, director, or other employee learns about confidential but significant (the law uses the term “material”) developments about the corporation, like an upcoming merger. This knowledge is based on the fiduciary relationship the individual has with the company. If this information were public, it would obviously affect the value of the stock either positively or negatively. But the person in possession of this non-public knowledge decides to buy stock at a lower price or sell at a higher price than the stock would be worth if the public knew about the information in question.

What Are Some Examples of Material Information?

Insider trading involves taking action on what the government considers to be “material” information that is not yet known to the general public. Material information is anything that could significantly affect an investor’s decision to either buy or sell a security. The SEC has prosecuted insider trading when individuals have acted on the following types of material information that was not yet public:

An upcoming merger or acquisition, when one company joins with or purchases another
Major changes in the financial performance of a company that have not yet been publicized (these changes can be positive or negative)
The upcoming launch of a new product or service that will likely be financially lucrative for the company
A pending regulatory approval that will allow the company to put a product on the market or take some other action
Either a major problem with a product or service launch or the failure to obtain regulatory approval
Changes in the management or leadership of a company which could affect public confidence in the business

Dr. Nick Oberheiden

Founder

Attorney-at-Law

Lynette S. Byrd

Former DOJ Trial Attorney

Partner

Brian J. Kuester

Former U.S. Attorney

Hon. Kevin McCarthy

55th Speaker, U.S. House of Representatives (ret.)

Government Consultant

Mike Pompeo

Of Counsel

Former U.S. Secretary of State

John W. Sellers

Former Senior DOJ Trial Attorney

Linda Julin McNamara

Federal Appeals Attorney

Nicholas B. Johnson

Former Prosecutor

Roger Bach

Former Special Agent (DOJ)

Chris J. Quick

Former Special Agent (FBI & IRS-CI)

Michael S. Koslow

Former Supervisory Special Agent (DOD-OIG)

Ray Yuen

Former Supervisory Special Agent (FBI)

How Does the SEC Whistleblower Program Work?

An individual who has evidence of insider trading can report the information to the SEC’s whistleblower program and potentially qualify for a monetary reward. The information must be original, not already known to the public or the government, and produced voluntarily. The actions in question must violate federal securities laws against insider trading and must lead to the SEC successfully taking an enforcement action against the offending party.

If the SEC’s enforcement action results in monetary sanctions that exceed $1 million, the whistleblower could claim SEC whistleblower awards anywhere from 10% and 30% of the monetary sanctions collected. The SEC has paid about $1 billion to whistleblowers over the last several years, with some of the largest rewards being $50 million and more.

Can I Face Retaliation for Being a Whistleblower?

The SEC wants to encourage people with information about insider trading to step forward, so the law goes to great lengths to protect whistleblower rights. First, the SEC will maintain the confidentiality of anyone who reports the information they know. This means the agency will not disclose details that could directly or indirectly reveal who the whistleblower is.

Second, in the event that an employer or senior executive learns about the identity of the whistleblower (or suspects who the person is), the law prohibits taking retaliatory action against that person. There are many forms of illegal employment retaliation, such as:

Job termination
Denial of a planned promotion
Demoting the employee
Denying reasonable employee requests, such as for paid time off
Creating a hostile work environment
Harassing or threatening the employee

Contact our SEC whistleblower attorneys today for a confidential consultation to discuss your legal representation and whistleblower protection against corporate insiders, as well as to explore successful SEC enforcement action.

How Can a Whistleblower Attorney Help?

Filing and pursuing an insider trading case takes time, because the government has to investigate the SEC whistleblower claims, accumulate additional evidence, and decide whether it wants to initiate an enforcement action. Retaining knowledgeable SEC whistleblower lawyers will facilitate your insider trading case and help improve your chances of claiming a reward from the SEC whistleblower reward program. Hiring the whistleblower law firm of Oberheiden P.C. which has successfully represented SEC whistleblower clients, means we get to work by:

Examine the evidence and information that you have including that of Ponzi schemes, to determine whether it points to insider trading
Reviewing your evidence to decide if you may be eligible for a whistleblower reward
Reporting the information you have to the SEC and/or other federal government agencies by submitting all required paperwork to the appropriate parties
Staying in contact with the SEC and handling all communications with the agency
Working with you to provide additional information to the SEC if it is requested
Advocating for the highest possible reward amount by demonstrating the usefulness of your information to the SEC’s enforcement action
Protecting your confidentiality and helping you take advantage of anti-retaliation laws if necessary
Answering any questions and concerns you have about the whistleblower program

FAQ: Filing an Insider Trading Complaint

Who Can Be Considered an “Insider” in Insider Trading?

Although corporate officers, directors, and other employees are often the insiders who make trades based on nonpublic information, they are not the only ones. Other insiders can be significant stockholders (those owning more than 10% of shares), temporary insiders who work with companies in a position of trust (such as accountants and lawyers), and friends, associates, and family members of other insiders.

Which Factors Affect the Total Compensation Amount?

The range of whistleblower compensation is 10% to 30% of the amount recovered by the SEC. The actual amount will depend on factors such as how useful the information is, how much assistance and cooperation the whistleblower provided during the government’s investigation, and the government’s interest in deterring future similar instances of insider trading.

Can a Lawyer Help Me Win a Higher Reward Amount?

Hiring SEC whistleblower lawyers will make it easier to claim a higher reward amount in several ways. First, we will handle all aspects related to the paperwork and filing of the claim. Second, we can help accumulate additional evidence that substantiates the information you have. Third, we will help you remain cooperative with the government during its investigation. Finally, we will argue that the information you provided was useful, original, and of value to the SEC’s successful enforcement action.

What Counts as “Original” Information?

Original means the information is not already public and not already known by the SEC. If someone else possesses the same information and reports it first, then your information is no longer considered original. In other words, the government rewards those who report what they know first.

How Do I Remain Anonymous?

You can anonymously submit a tip about insider trading to the SEC and still qualify as a whistleblower. However, you will need an attorney to work on your behalf. Your attorney will assist with the evidence and paperwork you submit and take care of any additional requirements that must be met to maintain your anonymity. Count on our legal team to assist you.

What Does It Mean To Provide Information Voluntarily?

The government will only reward you for voluntarily providing information about insider trading. This means reporting information before the government asks you about it. If the SEC sends you a letter asking or demanding what you know about possible insider trading, and then you provide it, then the information would not be provided voluntarily. The same is true if you receive a request or demand from Congress or another enforcement or regulatory agency.

I’m Not Sure If the Information I Have Relates To Insider Trading. What Do I Do?

Insider trading is complicated, and defined by various laws, regulations, and court decisions. If you suspect that the information you have is related to insider trading, but you aren’t sure, let our firm take a look at it. We encourage you to contact Oberheiden P.C. today. We will provide an objective analysis of the information you have, maintain your confidentiality, and help you get started with an insider trading SEC whistleblower claim if you have a case.