• Friend and Family Perils: When the SEC Alleges Tipping
  • August 12, 2011 | Authors: Robert Greffenius; Dixie L. Johnson
  • Law Firm: Fried, Frank, Harris, Shriver & Jacobson LLP - Washington Office
  • Imagine the horror: a corporate executive confides in a family member, sharing information about her career (and, therefore, about her company), and the family member trades in the company‚Äôs securities. Or a young professional shares a house with a friend, who pieces together what the professional is working on and trades. Government insider trading investigations ensue, the traders are charged, and lives are changed, all because of an inadvertent tip. And, because these cases are built on circumstantial evidence and credibility assessments, there is always the risk that the government could take the view that the tips were not inadvertent, and could charge the corporate executive or young professional with tipping, furthering the nightmare.