Executives and others privy to non-public business information can face insider trading allegations when their personal investments reflect the misuse of their industry knowledge. Insider trading cases often involve someone capitalizing on an upcoming business merger, bankruptcy or public listing, but the Securities and Exchange Commission (SEC) has also begun looking into insider trading as it applies to cryptocurrency and similar digital assets as well.
This blog has previously covered the charges brought against a Coinbase product manager. The accusations involved sharing private company information with two other parties. The former Coinbase employee facing charges did not make the questionable purchases himself but rather told a friend and his brother about upcoming additions to the cryptocurrencies listed on Coinbase.
That professional has now entered a guilty plea and awaits sentencing for one of the very first insider trading cases where cryptocurrency is a major factor.
The consequences of the defendant’s plea
This case involves three people, one former Coinbase employee and two people he knew. One of those parties has already pleaded guilty, while the other remains at large and has not yet had his day in court.
After initially pleading not guilty in 2022 to charges related to sharing information with two others, the defendant has now entered a guilty plea. He spoke in federal court and acknowledged that he knew that the people he provided that information to would use it to make purchases. He expressed remorse for misusing the information that he had access to through his employment.
Although the sentence has yet to come down, a guilty plea might now mean between 36 and 47 months in federal facilities, in addition to the financial penalties the former product manager faces.
Insider trading accusations can prove financially devastating
It is common for those accused of insider trading and other forms of financial fraud to face repayment obligations as part of their sentence. They will also likely find it difficult to reestablish themselves in the professional world after a conviction for a serious white-collar criminal offense like insider trading.
Properly defending yourself against allegations of misusing company information can help you avoid the lasting consequences that an insider trading charge may cause. As a result, if you’re at risk of being convicted of white-collar wrongdoing, it is time to explore your legal options.
Please contact the attorneys at Ford O’Brien Landy LLP for insight and guidance
