Beth Haddock on Insider Trading [Podcast]


By Adam Turteltaub

Insider trading is illegal trading in securities based on material, non-public information in breach of a fiduciary or any other trust relationship.

That’s a lot of legal terms, and the issue is an ongoing headache for compliance professionals at publicly-traded organizations.

Beth Haddock, who has spent over 20 years in compliance and leads Warburton Advisers, explains that to help prevent insider trading violations, it’s essential for compliance officers to be present day to day and with an open door.  Employees have to feel comfortable coming forward with questions and concerns.

To get them in the door and head off risks?  Frequent training is critical, she says, and it works best when it is example-based and models proper behavior.  In this podcast she also advises having written policies and asking employees to certify adherence at least annually.

But don’t stop at the factory gate.  In this interconnected business world it’s important to remember that lawyers, bankers, customers, and vendors all carry insider trading risk.

Finally don’t forget one more risk area: cyberbreaches.  It’s not just the hackers.  Employees and vendors who respond to the breach before it becomes publicly known have information about what may be a material event  They need to be trained not to trade on that information.

Listen in to get the inside scoop on insider trading.