Insider Trading

Insider trading refers to the buying or selling of a public company's stock based on non-public, material information about the company. This activity is considered illegal and unethical, as it violates the principle of transparency and fairness in the securities markets. Insiders, who may include company executives, employees, or others with privileged information, are prohibited from trading shares based on confidential information that could influence an investor's decision. Insider trading can undermine investor trust, distort market integrity, and lead to legal repercussions for those involved. Regulatory bodies, such as the Securities and Exchange Commission (SEC) in the United States, monitor and enforce laws against insider trading to maintain a fair trading environment.