Fraudulent Insider Transactions

Fraudulent insider transactions occur when individuals within a company—like executives or key employees—take advantage of their privileged access to information to engage in deceitful activities before the company declares bankruptcy. This might involve transferring assets, selling shares, or manipulating financial records to protect their wealth or mislead investors and creditors. Such actions are illegal as they undermine the fairness of bankruptcy proceedings and can lead to severe legal consequences for those involved. Essentially, it’s about insiders exploiting their position to benefit themselves at the expense of others.