Insider Trading

In a broad sense, insider trading is obtaining information from nonpublic sources and using it for purposes of enhancing one's financial advantage. In a narrower sense, it refers to the purchase or sale of securities of a company, to the benefit of the seller or a third party, using inside information, understood as nonpublic information that the seller possesses as a result of having a fiduciary relationship with the company in question.

Inside information tends to be about something that may have an impact on the expected return or risk of a company: investment projects, appointments to the management team, plans for (or results of) research on new products, and so forth. For example, the purchase of shares of a pharmaceutical company by one of its ...

  • Loading...
locked icon

Sign in to access this content

Get a 30 day FREE TRIAL

  • Watch videos from a variety of sources bringing classroom topics to life
  • Read modern, diverse business cases
  • Explore hundreds of books and reference titles