Insider Trading Laws

Insider trading laws are regulations that prohibit the buying or selling of stocks based on non-public information about a company. These laws are designed to maintain fairness in the financial markets, ensuring that all investors have equal access to important information. When company executives or insiders trade based on confidential knowledge, it can lead to an unfair advantage and undermine public trust. Violating these laws can result in severe penalties, including fines and prison time, as they protect the integrity of market transactions and promote transparency.