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Alleged insider trader accused because of a Google search

When you receive insider information about a company -- such as from an employee who works at the company -- and you make profitable transactions based on the insider information, you could be violating Securities and Exchange Commission laws. Specifically, you could be committing an insider trading violation.

The SEC takes a serious approach to finding alleged violators of insider trading laws. In one recent case, the SEC accused a man of insider trading after he searched on Google "how sec detect unusual trade."

SEC alleges $120,000 in illegal profits due to insider trades

According to the SEC, the man searched for information about how the SEC detects people who commit insider trading, and then he carried out a slew of stocks and options transactions that brought him $120,000 in profits.

In addition to the phrasing referenced above, the SEC says the man also searched Google with the phrase "insider trading in an international account." The SEC has accused the man of profiting from information he received from his wife who works at the law firm Linklaters. The SEC has since arrested the man, and Linklaters has since suspended his wife from employment. The SEC did not include the wife in its criminal charges.

As for the trades in question, he was accused of buying securities in Stillwater Mining and Mattress Firm. Linklaters had been working to complete acquisition deals for both companies. Following the acquisitions, the man sold his holdings to receive big financial profits.

Prosecutors allege that the investor attempted to hide his trades by carrying them out through his mother's name. The SEC detected the alleged insider trades, however, by the fact that the trades were profitable and the same law firm advised on the merger deals.

The man will now face charges of wire fraud and securities fraud in Federal court. As an employee and postdoctoral student at MIT, authorities arrested him in Boston and prosecutors will try his case in federal court in Boston.

Not all accused of crimes are guilty

It's important to remember that when we gather information from a news article we are only hearing one side of the story. No court will view a person as guilty when he or she is accused of a crime in Colorado or elsewhere in the United States. Every person will remain innocent until -- and only if -- he or she is proved to be guilty beyond a reasonable doubt in court.

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