What are the legal restrictions on insider trading?
In Kansas, insider trading is illegal and carries serious penalties. Insider trading is when someone who has access to non-public, confidential information about a company uses the information to buy or sell stock. Insider trading is considered a form of fraud because it gives certain people an unfair advantage. The U.S. Securities and Exchange Commission (SEC) is responsible for enforcing insider trading laws. The SEC has established specific rules to prohibit insider trading and the penalties for violations can include jail time as well as monetary fines. The Kansas Securities Act also prohibits insider trading. According to the Act, someone who is trading on material, non-public information can be found guilty of a felony. A person convicted of such a crime can face up to five years in prison, and/or a fine of up to $2 million. The SEC and Kansas Securities Act require that people who may have access to material, non-public information about a company must not disclose that information to anyone else, even if that person is a close family member or friend. Additionally, people who are given the information may not use it for their own benefit in any way. Furthermore, people must not engage in any activities that would artificially inflate the value of the company’s stock or give them a greater chance of making a profit. It is important to note that insider trading is one of the most serious offenses in the business world. Insiders must never use confidential information for personal gain. They should adhere to all the applicable laws and regulations in order to avoid facing severe penalties.
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