What is insider trading?

Insider trading is a type of securities fraud. It occurs when a person who has access to confidential information about a company uses that information to buy or sell stocks. By doing so, they can take advantage of the market and earn a profit. Insider trading is illegal in Pennsylvania and across the United States. Insider trading can take many forms. It can occur when someone who is in a position of authority or trust, such as a company executive or board member, uses nonpublic information to buy or sell stocks. It can also be done by someone who has inside knowledge of impending events, such as an impending merger or an impending FDA approval. The penalties for insider trading in Pennsylvania are severe. Under state law, it is a felony punishable by up to five years in prison and a fine of up to $250,000 or three times the amount of the profit or loss from the offense. In addition, the U.S. Securities and Exchange Commission (SEC) and other federal agencies are empowered to bring civil enforcement actions against those who engage in insider trading. These penalties can include financial penalties, revocation of registration, and even jail time.

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What is insider trading?

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