Insider trading occurs whenever public stocks or other securities are traded with special information that is available only to certain individuals within the company. Illegal trading transactions are associated with white-collar crime, and normally occur between corporate executives, accountants or even business associates.
The Securities and Exchange Commission (SEC) monitors the sale of stock. As such, whenever the officers of a particular company purchase their own stock, they must report this to the commission. Those who fail to make such a report in Texas can be subject to criminal sanctions. A few illegal SEC actions might be:
- Failing to report the sale of stock
- Failing to disclose the actual amount or number of shares traded
- Attempting to hide certain financial transactions
- Performing trades in another’s name in order to avoid detection
Proving the Case
In order to prove that someone used insider information in Houston, the government will have to show that the accused did indeed possess such knowledge, and that there was an intent to profit from the illicit action. Defense attorneys will carefully scrutinize witnesses in an effort to uncover any inconsistencies in their statements that would show a conspiracy. They will also look over other evidence for inconsistencies that would show that the defendant is being used as a scapegoat and did not actually have involvement in a crime.