DEFINITION of 'Material Insider Information'

Material information, about certain aspects of a company, that has not yet been made public but that will have at least a small impact on the company's share price once released. It is illegal for holders of material insider information to use the information - however it was received - to their advantage in trading stock, or to provide the information to family members or friends so they can use it to make trades.

BREAKING DOWN 'Material Insider Information'

Getting information that a company's expected earnings per share for a given quarter could be markedly poorer than expected, or getting information about developments in an ongoing lawsuit involving a company are both examples of material insider information.

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RELATED FAQS
  1. What's the difference between insider trading and insider information?

    Learn about insider information and insider trading and the differences between the two; both involve nonpublic information ... Read Answer >>
  2. How often should I measure my company's key performance metrics (KPIs)?

    Learn the definition of illegal insider trading while reviewing the people who can be involved and the regulations and consequences ... Read Answer >>
  3. 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 Answer >>
  4. Can you accidentally engage in insider trading?

    Learn why it's possible to commit insider trading by accident, and why insider trading laws create logical inconsistencies ... Read Answer >>
  5. What is the difference between wash trading and insider trading?

    Explore the differences between two trading practices, wash trading and insider trading, and find out why these practices ... Read Answer >>
  6. Does a company logo change require a material disclosable event?

    A company logo change usually constitutes a material disclosable event. Securities law requires that companies disclose all ... Read Answer >>
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