Insider trading is the trading of a company’s stocks, bonds, or other securities by people who have gotten access to private data or information about the company. This practice is seen as a betrayal of a person’s fiduciary duty, and considered to be illegal by the Securities and Exchange Commission (SEC)—the federal agency that regulates the U.S. stock market.

According to SEC guidelines, when an individual with information that can change a company’s stock price sells or buys based on that information, they are involving themselves in insider trading.  In previous cases, the court ruled that traders could be found guilty if they are aware that the insider who betrayed information was doing so in violation of duty to the company.

New Decision May Change Everything

But in a recent landmark case against two former hedge fund traders—Todd Newman and Anthony Chiasson—the 2nd U.S. Circuit Court of Appeals changed this. They overturned the convictions and dismissed the cases of the two traders, while narrowing the definition as to what constitutes insider trading.

Under the court’s decision, an individual must be aware not only that breached information was erroneously released, but that it was released in return for financial benefit.

What does this mean? The decision could result in the reversal of previous convictions, and could limit the kinds of cases that can be prosecuted in the future.

Texas Federal Criminal Attorney: Complicated Law Requires Specific Knowledge

Still, the laws around insider trading are infamously unclear, and it can be a challenge to try to sift through them on your own. The government implicates people in insider trading with insufficient evidence all too frequently.

If you or a member of your company is facing insider trading charges, contact an attorney with experience in representing these types of cases. A knowledgeable Texas federal criminal attorney can investigate your case and help make sure your rights are protected and that you have the best chance at a positive outcome.