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Insider Trading

IN MOST JURISDICTIONS, insider trading can be legal, or illegal. Legal insider trading occurs when corporate insiders buy and sell stock in their own companies. When corporate insiders trade in their own securities, they must report their trades to the securities regulator. Illegal insider trading, a type of white-collar or corporate crime, refers to situations where a person deals on the basis of price-sensitive information which is not in the public domain. And at the time of the dealing, the information is likely materially to affect the price of the securities being traded. Two main types of illegal insider trading exist: the use of insider information by an insider for self enrichment, and the leaking of information by an insider to a third person (tipping), ...

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