Tipping

AAA

DEFINITION of 'Tipping'

The act of providing material non-public information about a publicly-traded company to a person who is not authorized to have the information. This is an illegal act. Information is considered non-public until it has been publicly released and the financial markets have had sufficient time to digest the impact the information may have had on prices.

INVESTOPEDIA EXPLAINS 'Tipping'

Investment bankers are often in possession of material non-public information that can be used for tipping, although occurrences of tipping are very rare. In the event that a person unknowingly passes on a tip, he or she may still have performed a criminal act by being careless with the information.

Tips can be used to make insider trades before the information becomes available to the public. The law prohibits tippees, or those who receive material non-public information, from making financial transactions based on the information they have received.

RELATED TERMS
  1. Investment Bank - IB

    A financial intermediary that performs a variety of services. ...
  2. Chinese Wall

    The ethical barrier between different divisions of a financial ...
  3. Insider Information

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

    The buying or selling of a security by someone who has access ...
  5. Material Insider Information

    Material information, about certain aspects of a company, that ...
  6. Brought Over The Wall

    A situation where an employee in the research department of an ...
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. Investing

    Why did the Department of Justice launch an inquiry into the sale of ImClone shares in 2001?

    On December 28, 2001, the FDA announced that it was rejecting ImClone's new cancer drug, Erbitux. The drug represented a major portion of ImClone's pipeline, so the company's stock took a sharp ...
  4. Investing Basics

    Policing The Securities Market: An Overview Of The SEC

    Find out how this regulatory body protects the rights of investors.
  5. Investing

    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 a corporation (this makes a company's directors and high-level executives ...
  6. You may owe money, but you still have rights. There's a long list of things debt collectors are banned from doing to you. Know what's illegal.
    Credit & Loans

    5 Things Debt Collectors Can't Do To You

    You may owe money, but you still have rights. There's a long list of things debt collectors are banned from doing to you. Know what's illegal.
  7. Sounds like a bad horror movie, but it really could happen to you. Here's how to identify zombie debt and send collectors back to the dead-debt graveyard.
    Credit & Loans

    How To Beat Off A Zombie Debt Collector

    Sounds like a bad horror movie, but it really could happen to you. Here's how to identify zombie debt and send collectors back to the dead-debt graveyard.
  8. Understanding how the debt collection business works will give you a better chance of coming out ahead if you ever have to tangle with a collection agent.
    Credit & Loans

    Inside Secrets Of The Debt Collection Business

    Understanding how the debt collection business works will give you a better chance of coming out ahead if you ever have to tangle with a collection agent.
  9. Investigate these expat havens if you seek a developed country with low barriers for getting a permanent resident visa – sometimes even citizenship.
    Personal Finance

    5 Developed Countries That Welcome Expats

    Investigate these expat havens if you seek a developed country with low barriers for getting a permanent resident visa – sometimes even citizenship.
  10. Two years into his first term, Mexican President Enrique Peña Nieto is following through on radical campaign promises he made to Mexican citizens for sweeping multi-industry reform.
    Investing News

    Mexicans Unsure about Mexican Reforms

    Two years into his first term, Mexican President Enrique Peña Nieto is following through on radical campaign promises he made to Mexican citizens for sweeping multi-industry reform.

You May Also Like

Hot Definitions
  1. Santa Claus Rally

    A surge in the price of stocks that often occurs in the week between Christmas and New Year's Day. There are numerous explanations ...
  2. Commodity

    1. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often ...
  3. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  4. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  5. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  6. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
Trading Center