How do people generally get convicted of insider trading? If you have a friendship with someone in senior management of a business on the stock exchange, does that mean that if you invest in it and end up with a great ROI, you’d be investigated, charged, and potentially convicted?

Question

I should have rephrased my question. Would knowing an executive and making a huge profit on a couple trades be enough evidence to get convicted of insider trading?

In: 9

Answer 1

That would be enough to investigate, but probably not enough to convict. They need to prove that you got info from the executive.

But the SEC is actually VERY tough on insider trading, unlike most other financial crimes. Such an investigation is no small matter. They put immense pressure on everyone involved. You’ll have to hire expensive defense attorneys.

I am not a lawyer. I am just a rando. Do not take legal advice from randos. And please do not commit felony insider trading. Or break any other laws while we are at it.

Answer 2

That would be enough to investigate, but probably not enough to convict. They need to prove that you got info from the executive.

But the SEC is actually VERY tough on insider trading, unlike most other financial crimes. Such an investigation is no small matter. They put immense pressure on everyone involved. You’ll have to hire expensive defense attorneys.

I am not a lawyer. I am just a rando. Do not take legal advice from randos. And please do not commit felony insider trading. Or break any other laws while we are at it.