Glossary

Insider trading refers to the buying or selling of a publicly-traded company's securities by individuals who have access to non-public, material information about the company.

This practice is illegal and unethical because it gives insiders an unfair advantage over regular investors who don't have access to this privileged information. It undermines the integrity of the financial markets and erodes investor confidence. 🚫

For example, an executive who learns that their company is about to announce a major partnership might buy shares before the news becomes public, hoping to profit from the anticipated increase in the stock price.

Fun fact: In 1980, the Securities and Exchange Commission (SEC) filed a landmark insider trading case against corporate raider Ivan Boesky, who was ultimately fined $100 million and sentenced to prison for his role in illegal trading based on non-public information. 🕵️‍♂️💰