Insider trading is against the law. When an insider, who has information about a company or particular investment, makes a securities trade based on privileged information it undermines the faith people have in the market and it potentially harms investors who did not have access to the same information at the same time.
Accordingly, the law prohibits trading by those who have nonpublic information that could affect a stock’s value. If you knew that insiders could buy or sell stock based on information that you didn’t have then you might be less likely to purchase stock because your chances of making money or being ahead of the market would be significantly reduced. You wouldn’t be wrong.
Don’t Be a Victim
You may not be able to prevent insider trading, but you may be able to recover if you have suffered a financial loss because someone else broke the law. If you have lost money because of insider trading you may want to contact a securities fraud lawyer to learn more about your rights and how to protect them.
Recent Insider Trading Headlines
Mark Cuban acquitted of insider–trading charges
Jury finds that billionaire did not violate securities law when he sold stock in an Internet company nine years ago.