What is Insider Trading?
Insider trading means trading stocks or securities of a public company while having insight into the material information or nonpublic information about their stocks.
Insider trading can either be done legally or illegally, depending on the laws and regulations of that state. It is considered a financial crime if done unlawfully. In most countries, it is deemed to be illegal because it gives a certain edge to that particular investor over others. By receiving a piece of nonpublic information, the investor may know when the share prices are likely to rise. The legal court of law may also charge such a person in that country.
Samuel Spottedhorse, in his book “Killing at Red Horse”, sheds light on the repercussions of insider trading portrayed in a thrilling story.
Legal Insider Trading:
The legality of such a trade depends on when the trade took place. The transactions of legal insider trading are registered with the SEC — Securities and Exchange Commission. If a CEO or any employee associated with a company, buys back the stocks of that company, such a trade is also considered legal.
Illegal Insider Trading:
The Securities and Exchange Commission (SEC) of the U.S. defines illegal insider trading as follows:
“The buying or selling a security, in breach of a fiduciary duty or other relationship of trust and confidence, on the basis of material, nonpublic information about the security.”
It is said to be an illegal trade when the investor is tipped-off regarding any valuable information, which may have a significant outcome or effect on the prices and profitability of the securities.
Laws Governing Insider Trading:
The laws regarding the penalty for illegal insider trading is different in all countries. Countries such as the USA, U.K., Norway, India, Canada have a robust and definitive punishment of incarceration if the alleged person is proven guilty. In the USA, a person committing an insider trade may also serve as long as 11 years in prison.
On the other hand, China practices lenient actions against such a trade, excluding the punishment of imprisonment and charging monetary fees against those proven guilty. They believe that insider trading should not be subjected to imprisonment. In most cases, the person has a successful and clean business record, which can exclude them from the charge of being a criminal.
Author’s Bio:
Samuel Spottedhorse has lived in Midland, Texas, most of his life and currently works over there as well. He’s an avid reader of different types of books, but his passion for mystery and thriller books is unparalleled. Killing at Red Horse ISBN: 191396924X is Samuel Spottedhorse’s first book, which is a product of his die-hard love for mystery and suspense fiction books. This book is set to enrapture its readers in a thrilling story when insider trading goes wrong and greed overtakes one’s good conscience. This book is a depiction of many people trying to live a better life but seeking it in the wrong way.
If you want discounts on your daily using products you can visit our website miserbee.com and get the best discount offers.
