Insider trading involves trading in a public company’s stock or other securities by someone with non-public, material information about the company. Insider transactions are legal if the insider makes a trade and reports it to the Securities and Exchange Commission, but insider trading is illegal when the material information is still non-public.
Those who commit insider trading face harsh consequences, so it’s important to know what it is and how to avoid it if you own company shares and have information that can affect other investors.
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