Question

Explain what insider trading is and why (or why not) you believe it is important to...

Explain what insider trading is and why (or why not) you believe it is important to monitor closely. What should the penalty be for insider trading?

Homework Answers

Answer #1

Insider trading is purchasing or selling of stock based on information that is not published in the public domain and other words a practice of buying and selling a publically traded company stock that company information is not available in the market. In most countries these trading practices of company stock many times illegal but not always and several restrictions from the government. These buying and selling practices are performed by an insider of an organization who has a very special and accountable position in the organization but for personal benefits that person leaks the information.

Insider trading needs to monitor for fair business practices and empowering the trust of investors and attract more investment.

Different countries have different penalty procedures but as per my view penalty should be based on the estimated inside trading value.

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