Insider trading is not always a crime, but here is when it becomes one.
Patrick Boyle breaks down the top five insider trading scandals in recent history. This video clarifies the legal boundaries of trading public securities and explains why using nonpublic information for financial gain is a serious violation of the law.
Insider trading refers to the purchase or sale of a public company's securities by individuals who possess nonpublic information. While insiders are permitted to trade under specific regulatory frameworks and reporting requirements, these rules vary significantly across different jurisdictions.
The practice crosses into illegality when trading decisions are predicated on information unavailable to the general public. This prohibition extends beyond the primary actor; it is also a criminal offense to disclose such confidential information to third parties for the purpose of executing trades. Both the source of the leak and the recipient who acts upon it face legal consequences.
