Question

Why is insider trading considered more unfair in some countries than in others? And what can be done to improve levels of ethics and fairness around the globe?

Answer 1

Insider trading is the trading of a public company's stock or other securities (such as bonds or stock options) by individuals with access to nonpublic information about the company. In various countries, some kinds of trading based on insider information is illegal. This is because it is seen as unfair to other investors who do not have access to the information, as the investor with insider information could potentially make larger profits than a typical investor could make. The rules governing insider trading are complex and vary significantly from country to country.

In other words, insider trading is buying, selling or dealing in securities, bonds, and stocks of a company by a director, manager, or employee of the company who has confidential information that is not accessible to the public.

Active leadership and integrity of management dictates these principles be diligently implemented and monitored, Material inside information must be kept confidential and restricts trading of securities, Access persons may not purchase IPOs due to the high potential for abusive trading practices, by imposing all this, mainly a code of ethics should be maintained in the firm or company where no information should be passed out of the chamber and completely decrease insider trading.