Insider trading puts the interests of an “insider” first and creates an unlevel playing field. It occurs when the trading of a company’s stock or other securities is based on material and information which is unknown to the public. Insider trading allows the insider to influence the value of stocks and creates an unfair advantage. It is also a breach of fiduciary duty.
Insider trading is very hard to prove and often demands a whistleblower coming forth. The violations are committed by corporate “insiders”, but the crime includes tipping the inside information to other parties such as business associates, accountants, lawyers and even family members and friends. Anyone who misappropriates non-public information and makes trades and transactions based on said information may be proven guilty of insider trading.