Insider Trading

The illegal practice of buying or selling securities based on material, non-public information about a company. The SEC vigorously prosecutes insider trading, and landmark cases like those of Ivan Boesky in the 1980s and Raj Rajaratnam in 2011 resulted in prison sentences and massive fines. Legal insider transactions -- where executives buy or sell their own company's stock and report it publicly -- are tracked closely by investors as a signal of management confidence.