Material Insider Information

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DEFINITION

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

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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