Insider Trading

In a broad sense, insider trading is obtaining information from nonpublic sources and using it for the purpose of enhancing one’s 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 (and duty) with that company. It is illegal in many countries and is often considered immoral, and those who practice it are often regarded as criminals. This entry defines insider trading and examines it from the economic and ethical points of view.

Inside information tends to be about something that may have an impact on the expected return or ...