|
 |
Insider trading is the trading of a corporation's stock or other securities (e.g. bonds or stock options) by individuals with potential access to
non-public information about the company. In most countries, trading by corporate insiders such as officers, key employees, directors, and
large shareholders may be legal, if this trading is done in a way that does not take advantage of non-public information. However, the
term is frequently used to refer to a practice in which an insider or a related party trades based on material non-public information
obtained during the performance of the insider's duties at the corporation, or otherwise in breach of a fiduciary duty or other
relationship of trust and confidence or where the non-public information was misappropriated from the company.
In the United States and several other jurisdictions, trading conducted by corporate officers, key employees, directors, or significant shareholders (in the U.S., defined as holders of more than ten percent of the firm's shares) must be reported to the regulator or publicly disclosed, usually within a few business days of the trade. Many investors follow the summaries of these insider trades in the hope that mimicking these trades will be profitable. While "legal" insider trading cannot be based on material non-public information, some investors believe corporate insiders nonetheless may have better insights into the health of a corporation (broadly speaking) and that their trades otherwise convey important information (e.g., about the pending retirement of an important officer selling shares, greater commitment to the corporation by officers purchasing shares, etc.)
Illegal insider trading is believed to raise the cost of capital for securities issuers, thus decreasing overall economic growth.
If you have allegedly committed and are under investigation for inside trading, you will need to speak with a lawyer who understands how to handle the complexities of defending an inside trading case. A experienced lawyer knows how to protect your legal rights and the specific laws associated with the charges that are placed against you
|
|
|
