What is insider trading?

Insider trading is a type of white collar crime in which a person uses confidential information to make a profit or avoid a loss in the stock market. The term “insider” refers to someone who has access to confidential information, usually because of their high-level position within a corporation or organization. This confidential information can include information regarding an upcoming merger, pricing decisions, or any other news that would affect the stock market. In South Dakota, insider trading is illegal. This crime can result in serious civil and criminal penalties, including fines of up to $5 million or more, as well as prison time. In addition to the legal penalties, people who are caught engaging in insider trading may be subject to public shame and embarrassment. In order to prevent insider trading, the government has laws and regulations in place to prevent this type of crime. The SEC (Securities and Exchange Commission) requires companies to make public any material information that could affect stock prices. In addition, the SEC can and has brought criminal charges against those who are caught participating in insider trading. Overall, insider trading is a white collar crime in which a person uses confidential information to make a profit or avoid a loss in the stock market. South Dakota has laws in place to prevent this type of crime, and those who are caught engaging in insider trading can face serious civil and criminal penalties.

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What is insider trading?

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