Most people are scared of insider trading, while others don’t shy away from it. It’s not
illegal in all situations, but even when the contrary applies, some people still do it
despite knowing that it’s not right. Usually, though, it is something that most traders are
trying to avoid, as they don’t want to deal with the legal consequences.
But can it happen accidentally? Is it possible for someone to accidentally commit a
crime like this? Here’s what you should know before you have to hire a DWI defense
attorney.
What Is Insider Trading?
Insider trading is referring to trading in a public company’s stock by a person with non-
public, material information about stocks. Although insider trading can be legal in some
instances, it matters when the insider makes the trade. It’s illegal if you do it at the
wrong times.
For example, if the material information is non-public at the time and the insider makes
the trade, then it’s illegal and there will be consequences for the action.
Is Accidental Insider Trading a Thing?
Believe it or not, but even people who are into insider trading can cause illegalities by
accident, and this can lead to consequences.
Some individuals may not know that it’s illegal. As a result, they may end up committing
accidental insider trading, which then leads to legal trouble. The laws regarding insider
trading are pretty vague, so people may not fully understand the extent of doing it at the
wrong times. People may end up using information they shouldn’t have used in the first
place, so they commit accidental insider trading without being aware that what they’re
doing is wrong and even illegal.
How to Avoid Accidental Insider Trading?
Here are some tips on what you can do to avoid committing insider trading by accident.
● Carefully Check Your Sources
Make sure you check out the information before you perform any trade. If anyone offers
you any type of information, you should first ensure that it’s available publicly. If it isn’t,
then you should not do the trade, or you’ll be putting yourself at great risk.
● Think Before Asking a Question
When asking questions, you should make sure you ask them in such a way that you do
not force someone to give you confidential information before a trade. You should not
make it seem like you are looking for that type of information in the first place.
Otherwise, you can get into trouble.
● Report to the Authorities
Did you receive information that you’re unsure if it’s public or not? If that’s the case, you
should report it to the right authorities. Doing so will show that you are unwilling to use
that information unless it’s public, and you’ll be respected as an honest and trustworthy
person.
The Bottom Line
Accidental insider trading can happen, but you should make sure you take all measures
to stay away from it. Never trade without knowing if the information is already public.