Insider Trading

Insider trading violates the obligation that the employee has to the company and its shareholders, as well as creates an uneven playing ground in the stock market. For this reason, it is illegal in the United States and most other countries. Essentially, it involves moving stocks and securities while having non-public information about the holding company of those stocks and securities. For example, if an employee is knowledgeable of an upcoming acquisition that the company hasn’t made public yet, trading on this information is illegal. At the crux of the issue is fairness: an employee of a company has first-hand knowledge that often isn’t made public, putting him or herself ahead of the game when compared to other investors.

Of course, these laws do not mean that employees cannot trade stocks and securities, but it does make trading a much more complex issue than it would be for an outside investor. Insider trading prevention training ensures that your employees understand exactly what they need to do before and after selling stocks and securities. In these videos, we cover the information in the United States Securities Exchange Act, Sections 16b and 10b, providing comprehensive training on what employees can and cannot do based on their ultimate legal obligation to the company shareholders.