Insider buying and selling occurs when an executive or employee of a publicly traded company uses information that is inaccessible to the public to help decide trading decisions. While insider trading is often scrutinized, the SEC has cracked down on illegal insider trading and set restrictions for legal insider trading. Perhaps the most infamous illegal insider trading deal occurred in 2001 when Martha Stewart avoided a loss of almost $45,000 in ImClone stock after selling her shares using information provided by her broker, Peter Bacanovic.
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