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)

References in periodicals archive ?
The result implies institutional investors may have engaged in stealth trading to expolit a noisy market.
Barclay and Warner (1993) confirm the presence of stealth trading among institutional investors and thus provide indirect evidence of the existence of market noise.
Evidence of stealth trading by institutional investors could therefore confirm the presence of a noisy ADR market in which insitutional investors exploit their information advantage.