Is it legal for business “insiders” to use their knowledge of private company information information to benefit themselves?

UPDATED: Jul 2, 2014

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Is it legal for business “insiders” to use their knowledge of private company information information to benefit themselves?

My mother was running a restaurant on contract with an office building. At the end of her contract, they opened it up to other proposals, and the contract was not guaranteed back to her. The individual that won the contract was my mother’s accountant and his wife (the wife was my mother’s employee as well). My mother seems to think it’s illegal for them to use their knowledge of the business to “outbid” us for the contract. Is she right that it’s illegal? Is their some code of ethics for CPA’s this might have violated?

Asked on July 2, 2014 under Business Law, Washington


Maury Beaulier /

Answered 8 years ago | Contributor

If the accountant was an independant contractor with their own business, and they did not have any type of contract that protected prorpietary informatoinn, then there is no preclusion against the proposal.  Your particular case would have to be reviewed to determine the nature of the relationship.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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