insider trading

Học thuật
Thân thiện
Definition

Noun: - The illegal practice of trading a public company's stock or other securities by individuals with access to non-public, material information about the company. This activity is considered a breach of fiduciary duty or other relationship of trust and confidence, and is prohibited because it gives the trader an unfair advantage over the general investing public.

Usage
  • The term is used primarily in legal, financial, and regulatory contexts to describe a specific type of securities fraud.
  • It is typically used as an uncountable noun (e.g., "insider trading," not "an insider trading").
Examples
  • The CEO was convicted of insider trading after buying shares just before the positive earnings report was publicly released.
  • Regulatory bodies like the Securities and Exchange Commission (SEC) actively investigate cases of suspected insider trading.
  • The new law imposed stricter penalties for insider trading to ensure market fairness.
Advanced Usage
  • "to engage in insider trading": to participate in the illegal activity.
    • The executive was accused of engaging in insider trading.
  • "insider trading case/investigation/scandal": common collocations describing the legal or public aspect of the activity.
    • The newspaper uncovered a major insider trading scandal involving several hedge funds.
Variants and Related Words
  • Insider Trader (noun): A person who commits the act of insider trading.
    • The court sentenced the insider trader to five years in prison.
  • Insider Information (noun): The non-public, material information that is the basis for insider trading. This is the information that is unlawfully used.
    • He was prosecuted for acting on insider information.
Synonyms
  • Securities fraud: A broader category of illegal acts related to financial markets, which includes insider trading.
  • Illegal trading: A general term that can encompass insider trading among other violations.
Related Phrases
  • "tippee liability": The legal liability faced by a person who receives and trades on inside information (a "tip") from an insider.
    • The lawyer faced tippee liability for trades made based on the confidential information.
  • "misappropriation theory": A legal theory under which a person can be liable for insider trading for stealing confidential information from their source, even if they are not a traditional corporate insider.
    • The conviction was upheld based on the misappropriation theory of insider trading.
Noun
  1. buying or selling corporate stock by a corporate officer or other insider on the basis of information that has not been made public and is supposed to remain confidential