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

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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

Answers:

Maury Beaulier / MinnesotaLawyers.com

Answered 6 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.


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