What is the difference between insider trading and securities fraud?

Insider trading and securities fraud are two distinct violations of the law in Washington and across the country. Insider trading is the term used when people with access to non-public information about a company (such as a financial statement before it is released to the public) use this information to buy or sell shares of that company while knowing that it will affect the price. Securities fraud is an umbrella term referring to any illegal activity involving stocks, bonds or other securities. It encompasses acts like misleading investors about the value of a company’s assets, manipulating the stock market by creating false demand for a security, and engaging in insider trading. The biggest difference between insider trading and securities fraud is that insider trading involves the use of non-public information, while securities fraud does not. Insider trading also refers to the act of buying or selling securities while having access to non-public information that could affect the price. In contrast, securities fraud is a broader term that includes a variety of activities, such as misleading investors or manipulating the stock market. In Washington, both insider trading and securities fraud are illegal. Both acts are investigated and prosecuted by the United States Securities and Exchange Commission (SEC) and the Federal Bureau of Investigation (FBI). These violations of the law can result in fines, prison time, and other serious punishments. If you suspect that you or someone you know is engaging in these activities, it is important to contact the appropriate authorities immediately.

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What is the difference between insider trading and securities fraud?

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