What are the legal restrictions imposed on insider trading?

In North Dakota, insider trading is a form of illegal activity that involves buying or selling stocks, options, or other securities based on non-public knowledge that could give an investor an unfair advantage in the market. This type of investment activity violates federal and state laws that are designed to protect ordinary investors from fraud and manipulation. The North Dakota Securities Department warns that ordinary investors should not rely on non-public information when making investment decisions. Doing so can be considered insider trading and result in significant criminal penalties, such as fines, jail time, or both. Insider trading is also a form of securities fraud. It is illegal for corporate insiders, such as officers, directors, and employees, to trade on the basis of non-public information they obtain from their positions in the company. Insiders can, however, trade on the same basis as any other investor, by purchasing and selling securities on the open market at the same time as all other investors. Further, insiders must report their trades to the Securities and Exchange Commission (SEC). In addition, it is illegal for all investors to purchase or sell securities based on “material non-public information” they obtain from another person. This means that investors should not rely on non-public information they obtain from someone who might be considered an insider if it could affect the price of securities. The North Dakota Securities Department takes a zero-tolerance approach to insider trading. Any individuals or entities caught engaging in such activity are subject to civil and criminal penalties, including fines, jail time, or both.

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What are the legal restrictions imposed on insider trading?

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