Question

The SEC believes that anyone in possession of nonpublic material information about a company should be required to disclose it before trading on the stock of that enterprise. Instead, the courts have developed a more complex set of rules. Do you agree with the SEC or the courts on this issue?

Answer 1

The Securities & Exchange Commission (SEC) has developed a difficult set of rules for the practice of insider trading. Anyone in possession of material information about company is required to make a disclosure of the same before any trading is done. This is because the non-public material information about the company can be detrimental to the investors and risky for the interests of the investors.

 

The rules for insider trading include rules like fiduciaries, misappropriation, tippers, tippees, takeovers, and advanced planning. These are some of the rules for insider trading. Violating these rules means that the individual or company is engaging in insider trading which is illegal in nature and punishable under the law.

Violating these rules means that the individual or company is engaging in insider trading which is illegal in nature and punishable under the law.