Insider Trading

Year after year, insider trading remains a priority for the SEC, criminal prosecutors, and the plaintiffs’ class action bar. Few securities law issues capture the attention of the courts, the media, and the securities industry as insider trading — and the stakes have never been higher. The SEC and DOJ employ increasingly aggressive techniques to investigate and prosecute insider trading, and pursue a full arsenal of remedies, including penalties and disgorgement, public company officer and director bars, securities industry suspensions and bars, and prison terms in criminal cases.

Sidley lawyers have extensive insider trading defense and counseling experience. We represent companies and individuals in all aspects of SEC and DOJ investigations and other proceedings involving alleged insider trading.

• Government and defense counsel experience: Our practitioners bring to the table decades of experience not just defending clients in insider trading matters, but prosecuting insider trading while previously at the SEC and other government agencies. Our SEC alumni investigated and prosecuted nationally recognized insider trading cases at the agency, including cases litigated successfully through trial.
• Broad-based practice: We defend all aspects of insider trading matters — for example, complex and hard-fought investigations, initial enforcement trading inquiries, private litigation growing out of insider trading issues, and information requests from the Financial Industry Regulatory Authority. The firm’s Securities Enforcement practitioners team up with Sidley’s White Collar lawyers in defending clients in criminal cases, and with Sidley’s Securities and Shareholder Litigation colleagues in litigating SEC civil cases and private class actions. Our SEC enforcement lawyers work with Sidley’s Funds group to represent investment advisers in SEC exams involving insider trading concerns and other issues over material nonpublic information. Our insider trading/MNPI representations have included a wide variety of clients, such as hedge fund managers and other investment advisers, senior corporate officials, and public companies. Drawing on our defense and government experience, we also conduct internal investigations about insider trading issues.
• Counseling: Our lawyers counsel entities about a wide spectrum of MNPI issues, including trading issues, developing Rule 10b5-1 trading plans, and identifying best practices for opening and closing “trading windows.”
• Related issues: We are well-versed in issues that typically arise in matters involving insider trading, such as Regulation FD and MNPI policies. While a senior SEC official, one of our practitioners authored extensive Corporation Finance guidance on Regulation FD while another of our practitioners headed one of the SEC’s first FD enforcement matters. As defense counsel, we handle high-profile investigations specifically probing MNPI procedures, and use that experience to counsel advisers and broker-dealers prospectively on their policies.

In short, our experience and cross-group collaboration enable us to develop effective strategies and practical guidance in matters involving insider trading issues.