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| What exactly is insider trading? By The-Adviser.com - |
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SERVICES WHY US
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New York
- The Supreme Court has effectively made it illegal to trade stocks based on any corporate
information that is not publicly available - no matter who you are. Management and employees of a public firm are generally considered corporate insiders. The SEC considers these individuals to have a fiduciary duty to the company to refrain from using nonpublic information for gain. Hence, the law prevents not only trading themselves but from disclosing it as a stock tip to other individuals. Under a theory known as "misappropriation theory," individuals who do not work for the company but are are entrusted certain information by a company may violate securities laws if they trade or disclose the information as a stock to others. The SEC has also targeted individuals who are clearly third party individuals by trading on nonpublic information obtained from a corporate insider. Generally, the SEC tries to prove that the insider had breached his responsibility by making the disclosure and the person who benefited knew that it was nonpublic information. The Independent Adviser Corporation is a 100% Independent and 100% Objective Financial Advisory Firm that writes buy-side investment research. Our network of independent Fee-Only Financial Advisers serves individuals, families and businesses. They provide financial planning services, tax advice and offer professionally managed asset accounts. They do not underwrite corporate securities nor do they sell any proprietary products. To find out more or get a FREE consultation Ask The-Adviser.com. |
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