What is insider trading?

Insider trading is a type of white collar crime that occurs when a person with access to confidential information uses that information to make trades in the stock market. This type of crime generally involves someone in a privileged position, such as a company executive, who abuses their authority by using confidential information not available to the public to make money on the stock market. In Texas, insider trading is punishable under state law and is considered a serious offense. Insider trading can be either criminal or civil. Civil insider trading occurs when a person uses information not known to the public for their own gain in stock trades; this is also known as securities fraud. Criminal insider trading happens when someone deliberately uses confidential information to hide their activities, commit fraud, or manipulate the stock market in their own favor. Insider trading is illegal in Texas, and those found guilty of civil or criminal insider trading can face severe penalties. Depending on the amount of money gained, the penalties can range from stiff fines to jail time. The Texas Securities Act also makes it a crime to conceal financial information or to make false or misleading statements in order to manipulate the stock market. If caught and convicted, a person could be found guilty of a felony, which could lead to then years in prison.

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What is insider trading?

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