How is insider trading prosecuted?

In Virginia, insider trading is typically prosecuted under the laws of the federal government. The Securities and Exchange Commission (SEC) is responsible for overseeing the trading of securities in the US and has established rules to prevent insider trading. Insider trading is generally defined as either trading on material non-public information, or “tipping” someone else about material non-public information and then trading on the tips. Under the SEC’s rules, individuals are not allowed to trade on material information that they have obtained while working at the company. If the individual profits from their trading, they can be charged with insider trading. When the SEC believes someone has violated insider trading laws, they will typically investigate the situation and bring civil charges against the individual. This could involve seeking a return of profits from the stock trades, as well as a penalty. In certain cases, criminal charges can also be brought against someone. In order to be convicted of insider trading in Virginia, prosecutors must prove beyond a reasonable doubt that the individual had access to material non-public information and then used it to trade on the stock market. Even if someone is found guilty of insider trading, judges may exercise discretion in terms of the severity of the punishment. Penalties can range from probation to significant fines and jail time.

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