Insider trading

Uncommon card · No. 129041

Insider trading is the trading of a public company's stock or other securities (such as bonds or stock options) based on material, nonpublic information about the company. In many countries, trading based on insider information is illegal. The rationale for this prohibition of insider trading differs between countries and regions. Some view it as unfair to other investors in the market who do not have access to the information, as the investor with inside information can potentially make larger profits than an investor without such information. Insider trading is also prohibited to prevent the directors of a company (the insiders) from abusing a company's confidential information for the directors' personal gain. The rules governing insider trading are complex and vary significantly from country to country, as does the extent of enforcement. The definition of 'insider' in one jurisdiction can be broad and may cover not only insiders themselves but also any persons related to them, such...

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