UK Accounting Glossary
Information gained by someone inside, or close to, a listed company which could confer a financial advantage if used to buy or sell shares. It is illegal for a person who is in possession of inside information to buy or sell shares on the basis of that information.
Insider trading is the trading of a public company’s stock or other securities by individuals with access to nonpublic information about the company. In a number of countries, trading based on insider information is illegal.
Insider information is any kind of data pertinent to the inner workings of the corporation that has not yet been revealed to the public. Corporate information that has been relayed via financial statements, press releases, or any generally accessible media would not be considered insider information. Insider information may become available to virtually anyone, including corporate executives, stockbrokers, other company employees, and even family members. Individuals who are purview to inside information are known as insiders. Use of insider information has a vast potential for having a serious and detrimental effect on the securities and derivatives of a given corporation. Thus, exploiting insider information for material gain may be deemed unlawful. One example of insider information abuse is insider trading.
Whilst it’s not proven, it’s still highly possible they were acting on some kind of insider information.
The media played a key role in protecting certain investors by spreading insider information to a wider audience.
The company also accused him of using insider information to help acquire his job at Facebook.
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This glossary post was last updated: 23rd December 2018.