insider trading


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insider trading

n. the use of confidential information about a business gained through employment in a company or a stock brokerage, to buy and/or sell stocks and bonds based on the private knowledge that the value will go up or down. The victims are the unsuspecting investing public. It is a crime under the Securities and Exchange Act, for which Ivan Boesky and others have been sentenced to prison for relatively short terms and only small fines, considering the percentage impact on their accumulated wealth. Joseph P. Kennedy, father of President John F. Kennedy, made much of his fortune in the 1920s by insider trading before it was a crime. When the Securities and Exchange Commission was created in the early days of the New Deal (1933), President Franklin D. Roosevelt appointed Kennedy to the Commission on the theory that it took an insider to catch insiders. (See: insider)

insider trading

noun criminality, disclosure of connidential information, illegal disclosure, illegal use, illegal use of secret information, illegality, impropriety, infraction, infringement, misappropriate nonpublic information and material, prohibited use of confidential information, SEC violation, use of restricted information, violation of law
Associated concepts: Rule 10b-5, Securities Exchange Act
References in periodicals archive ?
Ever since Henry Manne published his classic book Insider Trading and the Stock Market, scholars have debated whether insider trading has net benefits.
Though the 1934 SEA was meant to address the government's conclusion that the crash had been precipitated in part by the "manipulative operations by corporate 'insiders,'" insider trading was rarely prosecuted in the commission's early years.
Analysis of Alleged Insider Trading in the Context of What Was Known When and in the Context of the Alleged Insider's Other Trading
The settlement requires the firm to return USD10,082,725 that it earned from insider trading schemes, USD1,348,824 as prejudgement interest, and a penalty of USD10,082,725.
A lawsuit against Cohen filed by his ex-wife accusing him of insider trading in the 1980's was dismissed in 2011.
Insider trading is buying/selling of a security by someone with access to material, non-public information that has the potential to affect its price.
Understanding the reasons which lead potential offender to commit insider trading would help policy makers in determining the appropriate punishment for the offence in question.
The SEC brought civil charges against Rajaratnam on 16 October 2009, alleging that he and several others including his New York-based hedge fund advisory firm Galleon Management engaged in a massive insider trading scheme.
Want to know how to use insider trading information to assess good stocks and make more informed trades?
Third, price impact of insider trading is also greater to the extent that it provides a surprise element in contradiction to other market trends.
A related advantage of insider trading is that it provides firms with valuable information concerning prospective managers.
As a society, we have good moral reason to protect ourselves against this kind of economic harm, and laws prohibiting insider trading afford the relevant protection.