Insider trading is the act of using the material, non-public information about a company to make trading decisions. This information can come from company insiders, such as executives or board members, who are privy to confidential information.
It can also come from analysts or others who have access to this information. Insider trading is illegal in most jurisdictions because it gives the trader an unfair advantage over other investors.
When caught, insider traders can be subject to civil and criminal penalties.
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