Series 24: 2.2.1.3. Insider Trading

2.2.1.3.  Insider Trading

Insider trading occurs when someone uses material, nonpublic information to trade securities. “Material” in this context means information an investor would find relevant when making an investment decision. Material information has also been described as information that could affect the price of a security. It is unlawful for anyone who gains material, nonpublic information and knows it to be confidential to trade on such information. It is also unlawful for anyone to pass on inside information that is then traded on. Both the actions of the person who reveals information (the tipper) and the actions of the