Insider Trading

Insider trading includes lawful transactions by corporate insiders as well as conduct prohibited under applicable securities laws. Illegal insider trading involves specific legal elements concerning material nonpublic information and the circumstances of trading or tipping. In prominent United States rules, breach of a duty of trust or confidence is important; a general information advantage alone is not the full test.

Insider trading can refer broadly to transactions by corporate insiders, some of which are lawful. Illegal insider trading concerns specific legal prohibitions involving material nonpublic information and other required elements. In the United States, prominent rules address trading in breach of a duty of trust or confidence; liability can also involve tipping and particular statutory or regulatory provisions.

Do not collapse this legal category into every information advantage. Research skill, public analysis, confidentiality, duties, and the source of information all matter, and rules differ across jurisdictions. For a practical decision, preserve the information's status and seek appropriate compliance guidance before trading or sharing it. A general analogy about fairness cannot determine whether a particular transaction is lawful.

When to use it

When confidential information may affect securities trading, when considering whether information can be shared, or when distinguishing lawful insider transactions from prohibited conduct.

How it can help

Identify the contemplated securities activity, the source and status of the information, relevant duties, and applicable rules. Use appropriate compliance or legal guidance before acting on uncertain confidential information.