Insider Trading Act of 1988

AAA

DEFINITION of 'Insider Trading Act of 1988'

An act enabled in 1988 to increase the liability penalties to all involved parties to insider trading. This act was established due to the increase in high profile insider trading cases, as well as the increase in monetary values of the trades. The act allows the SEC to order a penalty of up to three times the profit, and the guilty parties may serve significant jail time according to the extent of their crime.

INVESTOPEDIA EXPLAINS 'Insider Trading Act of 1988'

Insider trading occurs when members outside of the establishment are given information which is not available to the public as a whole, and use it to increase their wealth through buying/selling stock.

RELATED TERMS
  1. Insider Trading Sanctions Act Of ...

    Legislation that allows the SEC to seek a civil penalty, of up ...
  2. Functional Regulation

    A concept stating that a company with a specific business should ...
  3. Insider

    A director or senior officer of a company, as well as any person ...
  4. Whistleblower

    Anyone who has and reports insider knowledge of illegal activities ...
  5. Insider Information

    A non-public fact regarding the plans or condition of a publicly ...
  6. Insider Trading

    The buying or selling of a security by someone who has access ...
RELATED FAQS
  1. What exactly is insider trading?

    An "insider" is any person who possesses at least one of the following: 1) access to valuable non-public information about ... Read Full Answer >>
  2. What happens to the fines collected by the Securities and Exchange Commission?

    When the Securities and Exchange Commission (SEC) enforces a civil action against a corporation or an individual found guilty ... Read Full Answer >>
  3. What's the difference between insider trading and insider information?

    Insider information is the knowledge of nonpublic material about a publicly traded company that may affect the stock's price. ... Read Full Answer >>
  4. What licenses and certifications do you need for a career in portfolio management?

    Traditionally, a career in portfolio management requires a certain level of education, professional licensing, on-the-job ... Read Full Answer >>
  5. Why does financial accounting have to comply with GAAP?

    Not all financial accounting practices in the United States have to comply with generally accepted accounting principles ... Read Full Answer >>
  6. What is required to become an accredited investor in a private placement?

    The term "accredited investors" is defined by the U.S. Securities and Exchange Commission (SEC) as individuals with a net ... Read Full Answer >>
Related Articles
  1. Markets

    What Investors Can Learn From Insider Trading

    Some insider trading is actually legal - and can be extremely telling for investors.
  2. Options & Futures

    Insider Selling Isn't Always A Bad Sign

    Predated trades at regular intervals can instill confidence, not fear, for investors.
  3. Economics

    Defining Illegal Insider Trading

    The better you understand why insider trading can be criminal, the better you'll understand how the market works.
  4. Options & Futures

    When Insiders Buy, Should Investors Join Them?

    Insider tracking can inform your investment strategy, but it requires research and a level head. Find out what to look for.
  5. Options & Futures

    Can Insiders Help You Make Better Trades?

    Find out why the trading activity of owners and executives can be a valuable trade-confirmation tool.
  6. Options & Futures

    Keeping An Eye On The Activities Of Insiders And Institutions

    These transactions reveal much about a stock. We go over what to consider and where to find it.
  7. Options & Futures

    Delving Into Insider Investments

    Keeping tabs on company executives can provide clues about where a stock is headed.
  8. Investing

    REITs 101: How They're Regulated

    Here's everything you need to know about REITs in less than five minutes.
  9. Investing

    Buy Stock With Insiders: How To Track Insider Buying

    Insider buying can be a sign that a company's stock prices will soon rise. Here's how to keep track of insider buying on public databases and websites.
  10. Mutual Funds & ETFs

    How To Start a Hedge Fund In the United States

    A general overview of how to start a hedge fund firm in the United States, including complying with state and federal regulations.

You May Also Like

Hot Definitions
  1. Fisher Effect

    An economic theory proposed by economist Irving Fisher that describes the relationship between inflation and both real and ...
  2. Fiduciary

    1. A person legally appointed and authorized to hold assets in trust for another person. The fiduciary manages the assets ...
  3. Expected Return

    The amount one would anticipate receiving on an investment that has various known or expected rates of return. For example, ...
  4. Carrying Value

    An accounting measure of value, where the value of an asset or a company is based on the figures in the company's balance ...
  5. Capital Account

    A national account that shows the net change in asset ownership for a nation. The capital account is the net result of public ...
  6. Brand Equity

    The value premium that a company realizes from a product with a recognizable name as compared to its generic equivalent. ...
Trading Center