Networking is crucial to business success. From helping you find a new job to helping connect you with clients, the people you know are crucial to how high you can go and how much you can earn.
You may have joined business networking groups or made a point of dropping in to professional happy hours at a popular professional establishment. Having a group of social friends with whom you talk business can benefit all of you.
However, sometimes the information that they share with you might put you in a legally difficult situation. If someone drinks too much and starts sharing secrets about their company that they probably shouldn’t, the end result of that interaction could eventually be insider trading charges.
Someone’s drunken confession could be an unfair advantage for you
Insider trading is a crime if it involves someone with non-public information making financial or trading decisions based on that knowledge.
If someone in your business club informs you that their employer is about to file Chapter 11, you might sell any stocks that could be impacted by that. On the other hand, if you learn that a business is about to acquire another company or announce a massive new product mine, you might buy stock based on information that you should not have. Either action could constitute insider trading.
Insider trading can be hard to prove but devastating for professionals
You might think there’s no harm in acting on information about a business — especially when you get information not in an email from a former coworker but rather face-to-face with someone to whom you have no formal connections.
However, those trades that you make might wind up scrutinized and draw attention to your trading activity. There could be criminal consequences. Anyone accused of insider trading or similar white-collar crimes can fight those charges with the help of an experienced attorney.