What is insider trading?

Insider trading is the practice of buying or selling stocks, bonds, or other investments based on insider information. This type of trading is illegal in Washington and can result in criminal penalties if a person participates in it. In Washington, insider trading is defined as any transaction that utilizes material nonpublic information. This information could include information about the company’s financials, industry trends, and even rumors of potential mergers or acquisitions. Insider trading occurs when someone misuses this confidential information for financial gain. This type of fraudulent activity can be hard to detect since individuals may not be aware that they are trading on inside information. Proving insider trading also requires more than just circumstantial evidence; it requires direct evidence of the person trading on the information. In Washington, the Securities and Exchange Commission (SEC) is the agency responsible for enforcing the laws that protect investors from insider trading. Insiders (such as corporate officers and employees who have access to the company’s confidential information) are prohibited from trading or giving away material nonpublic information to others. Violators of these laws can face serious civil and criminal penalties. Additionally, the SEC can also take action against anyone who attempts to use insider information to make a profit.

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What is insider trading?

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