Managing your own investment portfolio gives you more control over your financial future as you plan for your eventual retirement in California. However, there are many pitfalls when making trading decisions. Our legal team at Ron Cordova Attorney-at-Law often provide counsel to investors who are unsure whether their activities are illegal insider trading.
According to MoneyCrashers.com, you really could accidentally engage in insider trading. For example, if you receive a tip on securities trading, and that information is given in breach of a fiduciary duty and is not public information, your purchase or sale of the security could be illegal. If you have a friend or family member who is part of a large corporation, and he or she regularly gives you advice about investments in that company, it is a good idea to verify that the information is public before you place your trades.
You could also slide over the line into possible illegal activity if you ask leading questions or otherwise appear to be prompting someone to give you confidential information. Whether the person who is privy to the answers to your questions takes you up on it or not, you could find yourself in hot water.
Typically, the U.S. Securities and Exchange Commission does not conduct investigations based on individual complaints, so you may not find yourself in trouble because someone reported you. However, the SEC does use market surveillance systems to identify abnormal patterns. If you happen to be involved in the trades that contributed to that pattern, you could end up being investigated and prosecuted by the federal government.
You can find more information about financial crimes and federal charges on our webpage.