Why is it illegal to trade on insider information? Provide an example in your own words.

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Insider trading on the stock exchange is the manipulation of the issuer’s securities based on information that is closed to a wide range of people. In other words, the insider knows something significant about the company and makes a sale or purchase of assets depending on the nature of the news.

Thus, an insider divulges confidential information for trading and making a profit, so insider trading is illegal. For example, an employee of a large company knows that the company will soon release a new revolutionary product and buys shares with the intent to sell them after the price rises.

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Academic.Tips. (2023) 'Why is it illegal to trade on insider information? Provide an example in your own words'. 19 May.

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Academic.Tips. (2023, May 19). Why is it illegal to trade on insider information? Provide an example in your own words. https://academic.tips/question/why-is-it-illegal-to-trade-on-insider-information-provide-an-example-in-your-own-words/

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Academic.Tips. 2023. "Why is it illegal to trade on insider information? Provide an example in your own words." May 19, 2023. https://academic.tips/question/why-is-it-illegal-to-trade-on-insider-information-provide-an-example-in-your-own-words/.

1. Academic.Tips. "Why is it illegal to trade on insider information? Provide an example in your own words." May 19, 2023. https://academic.tips/question/why-is-it-illegal-to-trade-on-insider-information-provide-an-example-in-your-own-words/.

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Academic.Tips. "Why is it illegal to trade on insider information? Provide an example in your own words." May 19, 2023. https://academic.tips/question/why-is-it-illegal-to-trade-on-insider-information-provide-an-example-in-your-own-words/.

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"Why is it illegal to trade on insider information? Provide an example in your own words." Academic.Tips, 19 May 2023, academic.tips/question/why-is-it-illegal-to-trade-on-insider-information-provide-an-example-in-your-own-words/.

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