How is insider trading prosecuted?

In New Mexico, insider trading is prosecuted under the Securities Exchange Act of 1934. This federal law makes it illegal for anyone who has access to confidential information while employed by a public company to trade on such information. Insider trading can also occur when someone has a relationship with someone else who has access to confidential information and trades using that information. The U.S. Securities and Exchange Commission (SEC) enforces the Securities Exchange Act of 1934. Any violation of the Act can result in criminal prosecution, civil enforcement action, or both. If someone is found guilty of insider trading in New Mexico, they may face prison time, hefty fines, or both. The SEC will usually investigate any suspicious activity, and if the SEC finds evidence of insider trading they will refer the case to the Department of Justice (DOJ). The DOJ may then bring charges against the accused party, and the judge or jury will determine if they are guilty. The severity of punishment will depend upon the circumstances of the case and the defendant’s history. Insider trading is an extremely serious offense and carries severe penalties in New Mexico.

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