State v. J.A. – First Degree Rape
On Feb. 14, H.J. Heinz Co. announced that Brazilian company 3G Capital and Warren Buffett’s Berkshire Hathaway Inc. intended to buy out the company for $28 billion. The stock market responded swiftly to the announcement and shares of Heinz stock increased in value by 20 percent in one day to $72.50 per share.
But the Securities and Exchange Commission (SEC) was watching and it wasn’t happy with what it saw: indicators of federal white-collar crime. The day before the announcement, Heinz stock traded at double the average daily volume for the month prior. Close to 3.5 million shares in the ketchup company traded hands on Feb. 13, a number not seen by those watching Heinz stock since it had announced its quarterly earnings in November.
Leading up to the announcement, block trading of Heinz stock had also shown an uptick. Block trades are orders of 10,000 or more shares of a single company’s stock. Two block trades were made on Feb. 11, three on Feb. 12, and 15 on Feb. 13.
In response to what it considered suspicious trading activity, the SEC filed a complaint on Feb. 15 and requested that the court freeze the accounts of unknown traders who had purchased call options of Heinz stock the day before the buyout was announced. The unknown trader(s) purchased more than 250,000 options, which gave them the right to purchase Heinz stock at $65 per share through June; following the buyout announcement, the value of that $90,000 investment skyrocketed to $1.8 million.
A highly suspicious trade is not necessarily an illegal trade. In fact, insider trade is not necessarily an illegal trade. According to the SEC, the phrase “insider trading” includes both legal and illegal trading activity. Insiders such as directors, officers, and employees can buy and sell their own company’s stock, despite technically being “insiders.” This is not illegal insider trading.
Using material insider information to make a trade before the information has been released to the public is illegal and is considered a type of securities fraud.
The Securities Act of 1933 and the Securities Exchange Act of 1934 are key pieces of federal legislation that dictate what is prohibited as insider trading. Both were passed in response to the stock market crash of 1929 and intended to stop practices that were believed to have contributed to the crash.
Rules 10b5-1 and 10b5-2 were later passed to further define what constitutes illegal insider trading under Section 10(b).
When material, nonpublic information is intentionally given to an investor, all investors must be informed at the same time. This is called Regulation FD or Regulation Fair Disclosure.
Directors and officers of publicly traded companies must be aware of insider trading prohibitions and be careful that nonpublic information gained as a member of the board or as an executive does not filter into their stock purchases or sales. But it is not just those in positions of authority within a company that may be held liable for insider trading; any of the following may commit illegal insider trading:
Trading by insiders is not illegal once material information is made available to the public. In the Heinz example, trading on Feb. 14, after the announcement of the buyout, by an insider at the three companies involved would not have amounted to illegal insider trading. Insider trading protections are meant to keep investors on an equal playing field.
The U.S. economy appears to become more and more entwined in the stock market and securities industry each day. Because of this reliance on the market, the SEC has made enforcing anti-insider trading rules a top priority. According to the SEC, the agency pursued enforcement actions against 131 individuals and entities in 2012. In total, that consisted of 58 enforcement actions.
Over the past few years, the SEC has been focusing greater resources on rooting out securities fraud in the form of insider trading. The federal agency filed more insider trading enforcement actions between 2010 and 2012 than in any other three-year period.
If you are being investigated for insider trading violations or other securities fraud, you should speak with an experienced white-collar crimes defense attorney about your rights as soon as possible. The government has substantial resources behind it to pursue a case against you and you will need a strong defense strategy to preserve your assets, your reputation, and your lifestyle once the feds begin investigating.
State v. B.S.: Not Guilty Verdict in First Degree Murder Case.
In this case, our client was charged with First Degree Murder in connection with a “drive-by” shooting that occurred in Charlotte, NC. The State’s evidence included GPS ankle monitoring data linking our client was at the scene of the crime and evidence that our client confessed to an inmate while in jail. Nonetheless, we convinced a jury to unanimously find our client Not Guilty. He was released from jail the same day.
State v. S.G.: First Degree Murder Charge Dismissed.
Our client was charged with First Degree for the shooting death related to alleged breaking and entering. The State’s evidence included a co-defendant alleging that our client was the shooter. After conducting a thorough investigation with the use of a private investigator, we persuaded the State to dismiss entirely the case against our client.
State v. B.D.: First Degree Murder Charged Dismissed.
After conducting an investigation and communicating with the prosecutor about the facts and circumstances indicating that our client acted in self-defense, the case was dismissed and deemed a justifiable homicide.
State v. I.R.: Reduction from First Degree Murder to Involuntary Manslaughter and Concealment of Death.
Our client was charged with the First Degree Murder of a young lady by drug overdose. After investigating the decedent’s background and hiring a preeminent expert toxicologist to fight the State’s theory of death, we were able to negotiate this case down from Life in prison to 5 years in prison, with credit for time served.
State v. J.G.:
Our client was charged with First Degree Murder related to a “drug deal gone bad.” After engaging the services of a private investigator and noting issues with the State’s case, we were able to negotiate a plea for our client that avoided a Life sentence and required him to serve only 12 years.
State v. J.A. – First Degree Rape
State v. B.S. – First Degree Murder
State v. E.D. – Identity Theft
State v. J.A. – First Degree Rape
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