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Insider Trading

Insider trading is trading in the stock, debt, or derivative instruments of a corporation by any individual defined as an Insider of that corporation by the securities laws.

Most trades by insiders are legal; however, the securities laws of many countries broadly prohibit fraudulent activities of any kind in connection with the offer, purchase, or sale of securities. These provisions are the basis for many types of disciplinary actions, including actions against fraudulent insider trading. In the United States, insider trading is illegal when a person trades a security while in possession of material nonpublic information in violation of a duty to withhold the information or refrain from trading.

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Steven Huddart
Smeal College of Business, Penn State University, University Park, PA 16802-3603 USA
(814) 865-3271
(814) 863-8393 fax
huddart@psu.edu
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was last updated on Wed, Oct 7, 2009.
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