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Insider trading is the trading of a public company's stock or other securities (such as bonds or stock options) by individuals with

access to non-public information about the company. In various countries, insider trading based on inside information is illegal. This is because it is seen as unfair to other investors who do not have access to the information. The authors of one study claim that illegal insider trading raises the cost of capital for securities issuers, [1] thus decreasing overall economic growth. However, some economists have argued that insider trading [2] should be allowed and could, in fact, benefit markets. Noted economist Milton Friedman has been [3] quoted as saying "You want more insider trading, not less". Trading by specific insiders, such as employees, is commonly permitted as long as it does not rely on material information not in the public domain. However most jurisdictions require such trading be reported so that these can be monitored. In the United States and several other jurisdictions, trading conducted by corporate officers, key employees, directors, or significant shareholders must be reported to the regulator or publicly disclosed, usually within a few business days of the trade. The rules around insider trading are complex and vary significantly from country to country and enforcement is mixed. The definition of insider can be very wide and may not only cover insiders themselves but also any person related to them such as brokers, associates and even family members. Any person who becomes aware of non-public information and trades on that basis may be guilty.
Contents
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1 Illegal insider trading

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1.1 Definition of "insider" 1.2 Liability for insider trading 1.3 Misappropriation theory 1.4 Proof of responsibility 1.5 Trading on information in general 1.6 Tracking insider trades

2 Legal insider trading 3 American insider trading law

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3.1 Statutory law 3.2 SEC regulations 3.3 Court decisions 3.4 Insider trading by members of Congress

4 Security analysis and insider trading 5 Arguments for legalizing insider trading 6 Legal differences among jurisdictions

7 By nation

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7.1 European Union 7.2 Norway 7.3 United Kingdom 7.4 United States

8 See also 9 Notes 10 References 11 External links