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Insider Trading FAQ

Insider trading refers to the buying and selling of securities by insiders in publicly traded companies. Company insiders are corporate officers, directors, and beneficiary owners (10% owners).

When insiders trade securities of their own companies, they must report these trades to the Securities and Exchange Commission (SEC) within two business days. There are rules governing insider trading. For example, insider traders cannot take advantage of information that is not available to the public.

If it can be proved that an insider violated these rules and profited from insider trading, he or she has to return the profit to his or her company and may be sued in civil court.

There are a number of laws governing insider trading in the United States. Details see Insider Trading Laws in the United States.