Insider Trading and Off-Channel Communications in the Age of Remote and Hybrid Work Environments

From the beginning of the pandemic, the SEC warned about potential risks to market integrity posed by the transition to remote work. For example, in March 2020, the SEC issued a statement urging companies to be mindful of market integrity and confidentiality obligations. Given the unprecedented times, the SEC warned that remote work posed increased risks for insider trading and may lead a greater number of people to have access to MNPI than in normal times. They further cautioned that the MNPI “may hold an even greater value than under normal circumstances.” In the years since, the SEC’s concerns have materialized in a string of enforcement actions against individuals who gained access to MNPI as a result of the pandemic and misappropriated that information in pursuit of profit.

Source: Insider Trading and Off-Channel Communications in the Age of Remote and Hybrid Work Environments