Recently in Insider Trading Category

Insider Trading Claims Can Derail a Business Trying to Attract Investors

January 26, 2012

nyse.bmpRecent news broke that hedge fund Diamondback paid federal prosecutors $9 million to settle claims of insider trading on Wall Street after allegedly profiting illegally from trading shares of Nvidia and Dell, the Financial Times reports.

Allegations of insider trading are serious and can leave a mark on a company from which it may be difficult to break free. The skills of a contingency business litigation lawyer may be beneficial to a business in this situation, however.

Contingency law work is helpful to the company because they aren't required to put down any money. The law firm puts up the money and only is paid in the case of a victory or positive outcome.

At a time when the company may be in hot water and may need its capital to be fluid in order to pay fines, do public relations work or make other types of payments, having a law firm working for them and doing it with no money out of their pocket can be a big benefit. Whether the lawyers are needed to weed out bad employees or work with prosecutors to deal with the allegations, this setup can help a company in need.

The New York-based hedge fund worked with federal prosecutors in Manhattan to avoid company officials from being prosecuted criminally, according to the news report. They forfeited $6 million and agreed to a statement of facts that laid out the conduct of two employees. The company also will continue operating with the government.

The fund also paid out $3 million to resolve civil insider trading charges brought by the Securities and Exchange Commission. Some believe that the non-prosecution agreement was the first involving a hedge fund adviser.

Federal prosecutors so far have secured 56 convictions of traders, consultants and lawyers as part of an FBI operation regarding insider trading. The Diamondback settlement relates to trades from 2008 and 2009.

But some Diamondback employees have been prosecuted criminally. Recently, a former employee was one of seven people charged in an alleged $62 million insider trading scheme. A former employee recently entered a guilty plea. The news report states that the company managed $5.9 billion in December 2010, but that number has shrunk to $2.5 billion, following a November 2010 FBI raid.

It's obvious that these high-profile cases involving corporate misdeeds and employee ethical or criminal violations can be a major problem for the businesses that have to deal with this type of situation. Investors and other corporations that may do business with the company may also be bringing legal action.

Businesses who find themselves in this tough position may get served with legal notices from seemingly every angle. They need sound legal representation. For companies that don't have a team of experienced attorneys in-house, the next best thing is to find a strong team of lawyers willing to work on a contingency basis.

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Consultants Continue to Face SEC Insider-Trading Charges

February 3, 2011

729163_investing_1.jpgFour employees of a California research firm have been charged with insider trading by the U.S. Securities & Exchange Commission, according to a report in the Wall Street Journal.

The government is filing such charges with alarming frequency in the wake of the economic collapse. Consulting firms, hedge funds, traders, and corporate executives should consult an experienced law firm as early as possible when it is determined a firm is being targeted by federal investigators. Consulting a contingency business litigation attorney can help ensure your rights are protected at each stage of the process.

Our experienced white-collar criminal defense attorneys know what it takes to aggressively defend against charges of fraud, insider trading or other allegations of wrongdoing.

In this case, the former employees of a Mountain View research firm are charged by federal prosecutors in Manhattan as part of a broad probe into insider trading. Allegations are that the employees had inside ties to tech firms and passed along non-public information on earnings, sales and financial performance. That information was then allegedly used to benefit the firm's clients, including investors and hedge funds.

The lawsuit alleges the consultants received hundreds of thousands of dollars in fees as a result of sharing inside information. Authorities contend nearly $6 million in illegal profits were generated through trades in some of the nation's leading tech companies, including Apple Inc., Advanced Micro Devices Inc, Dell Inc, and Research in Motion Ltd., the maker or Blackberry.

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