19 Facts About Insider trading

Insider trading is the trading of a public company's stock or other securities based on material, nonpublic information about the company.

The rules governing insider trading are complex and vary significantly from country to country.

Many jurisdictions require that such Insider trading be reported so that the transactions can be monitored.

The authors of one study claim that illegal insider trading raises the cost of capital for securities issuers, thus decreasing overall economic growth.

However, some economists, such as Henry Manne, have argued that insider trading should be allowed and could, in fact, benefit markets.

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Example, illegal insider trading would occur if the chief executive officer of Company A learned that Company A will be taken over and then bought shares in Company A while knowing that the share price would likely rise.

Until the 21st century and the European Union's market abuse laws, the United States was the leading country in prohibiting insider trading made on the basis of material non-public information.

Insider trading has a base offense level of 8, which puts it in Zone A under the US Sentencing Guidelines.

US insider trading prohibitions are based on English and American common law prohibitions against fraud.

The misappropriation theory of insider trading was born, and liability further expanded to encompass a larger group of outsiders.

World Bank and International Monetary Fund now use the IOSCO Core Principles in reviewing the financial health of different country's regulatory systems as part of these organization's financial sector assessment program, so laws against insider trading based on non-public information are now expected by the international community.

Larry Harris claims that differences in the effectiveness with which countries restrict insider trading help to explain the differences in executive compensation among those countries.

Insider trading had been tipped off by a consultant to a company that the company was about to make a negative announcement regarding its clinical trial for a drug.

Insider trading was convicted in February 2014, and is serving a nine-year prison sentence.

Insider trading in India is an offense according to Sections 12A, 15G of the Securities and Exchange Board of India Act, 1992.

Insider trading is when one with access to non-public, price-sensitive information about the securities of the company subscribes, buys, sells, or deals, or agrees to do so or counsels another to do so as principal or agent.

Wall Street Journal, in a 2014 article entitled "Why It's Hard to Catch India's Insider Trading", said that despite a widespread belief that insider trading takes place on a regular basis in India, there were few examples of insider traders being prosecuted in India.

One former top regulator said that in India insider trading is deeply rooted and especially rampant because regulators don't have the tools to address it.

Practice of insider trading is an illegal act under Brazilian law, since it constitutes unfair behavior that threatens the security and equality of legal conditions in the market.