What is insider trading?

Insider trading is a white-collar crime that occurs when someone uses information that is not available or accessible to the public to make a profitable financial decision. It is illegal in California and across the United States. Insider trading is a form of fraud and a violation of securities law. Basically, insider trading happens when someone who has access to confidential information—information that is not available to the public—uses that information to buy or sell stocks or other securities on the stock market. For example, if a company executive has knowledge of an upcoming merger before it is released to the public, they may use that information to buy or sell securities and make a profit. Insider trading is illegal in California, and throughout the US, because it results in unfair competition and manipulates the stock market, which is potentially damaging to the economy. When someone is caught engaging in insider trading, they can face harsh financial penalties, including hefty fines and jail time. Consequently, it is important to keep any confidential information safe and secure. If a company has sensitive information that could potentially lead to insider trading, they should consider implementing certain policies that will help protect it against theft. Additionally, all individuals should refrain from using confidential information to make financial decisions in order to avoid insider trading.

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