"Legal implication of insider trading

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Expert Solution

The inside trading is doing the transactions in the concerned company's share and will prove to be harmful to the to the outside investors and shareholders as management and its employees can manipulate the buying at the knowledge of the specific news about the company.

As the illegal insider trading is disadvantagious to the existing outside shareholders so should be prohibited. On the other hand, legal insider trading also proves to be valuable and informative to investors and analysts

The “Insider trading” is usually taken in association with illegal conduct. Thus, government has taken actions against the Insider trading and concluded it as a criminal offence.

The legal version comes up when the companys insiders, officers, directors, top employees and big shareholders, buy and sell stock in concerned company's shares. SEC has made provisions regarding the corporate insiders trade in the concerned company's shares.

jeff jeffy answered 1 year ago

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