Insider trading is a serious securities fraud violation, which has significant civil, and criminal, penalties.
In recent years, the SEC and the Courts have expanded the definition of insider trading, which can now include trading insiders, and those who get information from insiders and even the random man in the street if the SEC believes that he obtained the information from someone who should not have the information. See SECLaw Blog posts on insider trading for more information.
While many people, including myself believe this has gone too far (See, SEC needs to be reigned in on the expansion of insider trading liability)
The SEC takes insider trading very seriously, and if you are found guilty of insider trading, the total fines and penalties imposed after a trial are over THREE TIMES the amount of profit that the SEC claims you made. And that is profit, without deducting any losses.
If you receive a subpoena from the SEC you need to speak to a securities attorney, BEFORE you speak to the SEC. Call my office at 212-509-6544 to discuss how we can help you. My partners and I have successfully resolved dozens of insider trading investigations for clients across the country.
Remember, Martha Stewart did not go to jail for insider trading, she went to jail to lying to investigators.