How to Report Insider Trading
Insider trading is easily one of the most frequently seen forms of securities fraud. When it occurs, it’s important to report it to the appropriate authorities so that it can be stopped and the responsible parties held accountable.
However, knowing that insider trading should be reported is one thing; knowing how to report insider trading is another. Detailed below is a brief description of the process.
Is the Insider Trading Illegal?
The first step to consider is whether the insider trading is actually illegal. Insider trading is against the law when the trader makes a transaction based on material information that isn’t available to the public at large.
Just because someone is an insider who trades in the company’s stock, that doesn’t make the activity illegal, although the individual does need to report the trades to the Securities and Exchange Commission (SEC). If the insider is trading based on information that’s available to everyone, then the trade is likely legal.
Internal Compliance Programs
It’s possible that the insider trading would be governed by a company’s or bank’s internal compliance program. If this is the case and the insider trading is illegal, it should be reported to a compliance officer. Once reported, the compliance team needs to take steps to address the fraudulent activity within 120 days.
If 120 days pass and nothing’s been done, or if it appears that the company’s executives are actively obstructing the internal investigation, it might be time to become a whistleblower by contacting the SEC. This could also be the case if the insider trading is serious enough that waiting 120 days would allow serious damage to be done to the company or its investors.
Contact a Whistleblower Lawyer and Report to the SEC
Once it’s time to contact the SEC, you should first consult with an accredited and experienced whistleblower lawyer. While you do have the option of contacting the SEC without a lawyer, working with legal counsel will give you the best chance to protect your whistleblower rights.
This includes remaining anonymous, limiting your own legal jeopardy if you were complicit in the insider trading, and protecting yourself from retaliation made by the target of the SEC investigation. An attorney can help you report your insider trading information through a Form TCR that includes everything necessary and maximizes your potential whistleblower reward.
Connect with an Insider Trading Whistleblower Attorney
Meissner Associates can help you report insider trading to the SEC. We are intimately familiar with the Dodd-Frank whistleblower rules and protections as our founder helped write them.
Get the best whistleblower legal help available by contacting us for a free, confidential tip evaluation today. Just call 1-866-764-3100 or complete the contact form found at the bottom of this page.