For investing to be fair, those purchasing an interest in a company or otherwise making major money moves need to base their actions on publicly-available information. Those with access to non-public information, such as the knowledge that a business will soon declare bankruptcy or announce a merger with another company, cannot use that information to make investments.
While you might never dream of leveraging what you learn through your job to make financial investments, you could still end up accused of insider trading if the people you know use your work knowledge for personal profit.
Insider trading can involve other people’s investments
Sharing some information may put you at risk, even if you don’t share it with the intent of helping someone invest. If you find a bar where other professionals tend to gather after work in the evenings, it might be a positive experience to share a drink and unwind with those who understand how stressful your career is.
However, when you talk about what you experience at work, some of those individuals might eventually use the information that you share when making a personal investment decision. If regulatory agencies ever learn about your social relationship with those investors, you, as well as your acquaintances, could potentially end up accused of insider trading.
Allegations of financial misconduct can lead to hefty penalties and possibly also jail time. How you defend yourself may vary depending on the relationship you have with any other parties involved and what prosecutors allege you did to improperly use private information.
Fighting back against accusations of a white-collar crime often requires a thorough analysis of the situation leading to your arrest.