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insider |
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In the context of federal regulation of the purchase and sale of Securities, anyone who has knowledge of facts not available to the general public. Insider information refers to knowledge about the financial status of a company that is obtained before the public obtains it, and which is usually known only by corporate officials or other insiders. The use of insider information in the purchase and sale of stock violates federal securities law. Insider trading entails the purchase and sale of corporate shares by officers, directors, and stockholders who own more than 10 percent of the stock of a corporation listed on a national exchange (any association that provides facilities for the purchase and sale of securities, such as the New York Stock Exchange). Insider reports detailing such transactions must be submitted monthly to the Securities and Exchange Commission. insider n. someone who has a position in a business or stock brokerage, which allows him/her privy to confidential information (such as future changes in management, upcoming profit and loss reports, secret sales figures, and merger negotiations) which will affect the value of stocks or bonds. While there is nothing wrong with being an insider, use of the confidential information unavailable to the investing public in order to profit through sale or purchase of stocks or bonds is unethical and a crime under the Securities and Exchange Act. (See: insider trading) See also: bystander, member How to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit webmaster's page for free fun content. |
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Insiders have enjoyed two years of lucrative stock sales, with $41 billion worth of insider sales to the public in 2004, a 40 percent increase from 2003, according to Thomson Financial. Probably the most surprising finding is that true inside information--the kind that tends to get insiders into trouble with the SEC--plays at most a minor role in the insider trading decisions of top executives. Yet during the last four decades the SEC has waged a campaign to maintain and expand the scope of the insider trading ban, perpetuating the myth that scores of insiders are secretly enriching themselves at the expense of the investing public. |
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