What are the differences between insider trading and securities fraud?

Insider trading and securities fraud are both illegal activities that involve securities, such as stocks and bonds. The main difference between these two actions is the intent of the perpetrator. Insider trading is the buying or selling of securities based on information that is not available to the public. In other words, someone with insider knowledge of a company’s finances shares that information with someone outside the company and then profits off that information. Insider trading is illegal in Washington, as it goes against fairness and ethical trading practices. Securities fraud is the deliberate manipulation or misstatement of information related to a security. It is often used to entice investors to buy or sell securities, or to hide something about the security that would otherwise reveal its true value. This can include creating false or misleading statements about a security, recommending that investors buy or sell securities based on false information, or failing to disclose important info to investors. Securities fraud is illegal in Washington, as it is intended to deceive investors, and is punishable by both civil and criminal means.

Related FAQs

What constitutes a misrepresentation in securities fraud?
What is a "material misrepresentation" in securities fraud?
What is a "reverse merger" and how does it relate to securities fraud?
What is a pump and dump scheme in securities fraud?
Are there any special accounting rules for insider trading in a securities fraud case?
What is a "pump and dump" or "flipping" scheme in securities fraud?
What are the differences between civil and criminal sanctions in securities fraud cases?
Are there special laws that protect investors from securities fraud?
How is scienter, or intent, established in securities fraud cases?
Are there any special accounting rules for securities fraud cases?

What are the differences between insider trading and securities fraud?

Related FAQs

Related Blog Posts