Insider Trading
Insider trading is trading in a security based on material information that is not public, typically by someone who has a fiduciary duty or who has misappropriated confidential information. In U.S. practice, it is illegal when the information is material and nonpublic and the person uses it in making a trade.
Example: An executive trades a company’s securities after learning nonpublic earnings figures, illustrating the kind of information that could trigger insider trading concerns.
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