Insider Trading Penalties
How to know if insider trading is wrong? Like in cricket, if it rains, the fielders do not face any problem, but due to bad pitch for the batsman, the game is stopped. Similarly to stop this undo advantage of the trader insider trading is illegal. Any person is banned to do trading if he has access to unpublished information about the company. It is not difficult for the exchange to catch the person who does the information on insider trading. There is a rule of Penalties that includes heavy fines and prison time.
Lastly, Insider trading could be considered legal if the insider reports of these trading are reported to the exchanges promptly.
Insider Trading
Sometimes there is some news that the stock exchange board has fined someone because he did insider trading of a company. Insider trading also had a small part in some movies like ‘Harshad Mehta scams’. Another popular stock market movie ‘Wall Street’ which was released in 1987 also mentioned insider trading.