Material Insider Information

AAA

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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  1. Dirks Test

    A standard used by the Securities and Exchange Commission (SEC) ...
  2. Insider Lending

    When a bank makes a loan to one or more of its own officers or ...
  3. Poop

    A slang term often used to describe inside information or people ...
  4. Insider

    A director or senior officer of a company, as well as any person ...
  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 Articles
  1. Markets

    What Investors Can Learn From Insider Trading

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

    Defining Illegal Insider Trading

    The better you understand why insider trading can be criminal, the better you'll understand how the market works.
  3. Markets

    Infamous Insider Traders

    Check out these bizarre insider trading cases that helped define the SEC's laws against it.
  4. 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.
  5. Bonds & Fixed Income

    How Diaspora Bonds Work

    Developing and emerging nations with sizable populations living overseas are using diaspora bonds to raise financing from emigrants.
  6. Economics

    America's Most Notorious Corporate Criminals

    Learn about the crimes and punishments of some of the most infamous convicted white-collar crooks.
  7. Economics

    The Economic Impact of Better US-Cuba Relations

    We examine what the normalization of relations between the US and Cuba will mean for the two countries' economies.
  8. Investing Basics

    What is the difference between a company's outstanding shares and its float?

    Understanding share counts, including outstanding shares relative to float, is an integral part of determining whether or not to invest in a particular company.
  9. Fundamental Analysis

    What are some CEO characteristics/behaviors that could lead to a drop in stock prices?

    Learn about CEO behaviors that may adversely affect a stock price. Explore the conviction of Martha Stewart for obstruction of justice and its consequences.
  10. Savings

    I’m twice divorced –-can I still collect spousal benefits?

    Unsure if you’re eligible for spousal benefits if you’re divorced –more than once? Rob Kron from Blackrock gives a simple answer.

You May Also Like

Hot Definitions
  1. Prospectus

    A formal legal document, which is required by and filed with the Securities and Exchange Commission, that provides details ...
  2. Treasury Bond - T-Bond

    A marketable, fixed-interest U.S. government debt security with a maturity of more than 10 years. Treasury bonds make interest ...
  3. Weight Of Ice, Snow Or Sleet Insurance

    Financial protection against damage caused to property by winter weather specifically, damage caused if a roof caves in because ...
  4. Weather Insurance

    A type of protection against a financial loss that may be incurred because of rain, snow, storms, wind, fog, undesirable ...
  5. Portfolio Turnover

    A measure of how frequently assets within a fund are bought and sold by the managers. Portfolio turnover is calculated by ...
  6. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
Trading Center