Investopedia explains 'Insider Information'
Insider information is knowledge about a publicly traded company that could be used to an investor's advantage. Knowing about a company's significant, confidential corporate developments, such as the release of a new product, could provide an unfair advantage if the information is not public, that is, if only a few people know about the developments.
In the United States, the Securities and Exchange Commission (SEC) regulated legal insider trades - where corporate insiders, including officers, directors and employees, buy and sell stock in their own companies. In addition, the SEC investigates instances of illegal insider trading. Those found guilty of insider trading can serve jail time and be fined.
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