The technology industry, driven by innovation, rapid growth, and high volatility, is a prime target for SEC insider trading investigations.  From global tech giants to early-stage startups, companies operating in this space frequently possess material, nonpublic information that can significantly affect stock prices once disclosed.  Information about upcoming product launches, patent approvals, cybersecurity incidents, and mergers or acquisitions can create enormous opportunities for insider trading abuse and, in turn, attract the investigatory interest of the U.S. Securities and Exchange Commission (SEC).

If you are a tech executive, engineer, employee, consultant, investor, or advisor under SEC investigation, it is critical to secure legal counsel with decades of experience handling high-stakes securities enforcement actions.  David R. Chase, Esq., a former SEC prosecutor and experienced SEC defense attorney, represents clients across the technology sector around the nation who face government scrutiny for alleged insider trading and related securities fraud violations.

Why the SEC Investigates the Technology Industry

The SEC views the technology industry to be particularly vulnerable to insider trading risks.  This is due to the frequency and magnitude of corporate events that can move markets and the widespread access employees and consultants have to confidential data.  Common areas of focus for the SEC include:

High-Profile Insider Trading Cases in the Tech Sector

Several notable investigations and prosecutions highlight the SEC’s aggressive focus on the tech industry:

1. Apple Inc.

Over the years, Apple has been associated with multiple leaks involving product launches and earnings forecasts.  In one case, a former supply chain manager pleaded guilty to passing confidential information to traders in exchange for kickbacks.  Although Apple itself was not implicated in wrongdoing, the case demonstrated the SEC’s commitment to rooting out insider trading at all levels of the corporate structure.

2. Intel Corporation

In 2020, the SEC charged a former finance manager at Intel for allegedly tipping a friend with nonpublic information about Intel’s earnings. The friend then traded options on Intel stock, generating significant profits. The case highlighted how internal financial data, particularly earnings reports, can be misused by those entrusted with sensitive information.

3. Silicon Valley Network Cases

Numerous investigations in Silicon Valley have involved informal “tip networks,” where tech employees, consultants, and venture capital insiders exchange MNPI.  The SEC and DOJ have pursued several of these cases, revealing how information can flow through social and professional networks, implicating both tippers and traders.

These cases illustrate the broad reach of insider trading enforcement in the tech industry, including against individuals who never directly traded on the information, but who have been accused of illegally sharing it.

Understanding Insider Trading in the Technology Context

Insider trading occurs when someone trades a security while in possession of material, nonpublic information obtained through a breach of duty or trust. The law also prohibits “tipping” such information to others who trade on it under certain circumstances.  In the tech world, these breaches can occur in a variety of ways:

• Engineers sharing pre-release information about products
• Employees leaking earnings data
• Executives discussing confidential M&A plans
• Friends or family members receiving stock tips based on workplace conversations

Insider trading charges can result in SEC civil penalties, disgorgement of profits, industry bars, and criminal prosecution by the U.S. Department of Justice (DOJ), with potential prison sentences for those convicted.

Because technology companies often move at a fast pace with large, decentralized teams and frequent innovations, these businesses can be especially susceptible to information leakage — and the SEC knows it.

Why You Need an Experienced SEC Defense Attorney

If you or your company has received a Wells Notice, an SEC subpoena, or even an informal inquiry from the SEC’s enforcement staff, your next move should be to retain an attorney who has the requisite experience, knowledge and judgment to effectively defend complex SEC enforcement matters.

David R. Chase, Esq., is a technology insider trading lawyer and SEC defense attorney with a national reputation for strategic, high-impact defense work. As a former SEC enforcement attorney, David understands how the agency builds insider trading cases: what evidence it looks for, how it interprets electronic communications and trading records, and how it assesses potential legal liability.

David Chase Offers:

Whether you’re a tech executive, engineer, compliance officer, or investor, David Chase provides discreet, strategic legal representation to protect your career and future.

Safeguard Your Career and Reputation

Being subject to an SEC insider trading investigation, even before any formal charges are filed, can seriously impact your job, your reputation in the tech community, and your personal finances.  Defending yourself requires the guidance of a seasoned legal professional who can navigate you through the process with the objective of avoiding being charged. 

When your good name, professional reputation and livelihood are on the line, David Chase stands ready to fight for you.

Don’t delay. If you’re under SEC investigation or worried about potential exposure, contact David R. Chase, P.A. at 800-760-0912 for a confidential consultation. You can also learn more about his services by visiting www.securitiesfrauddefense.net.