While often associated with illegal activity, insider trading actually encompasses both illegal and legal trading of securities, and is monitored by the Securities and Exchange Commission (SEC.) Illegal insider trading occurs when a person uses material, non-public information to make a decision about buying or selling a security. The SEC has prosecuted insider-trading cases against officers, directors and employees of involved corporations, as well as people who are considered “tippees,” such as friends of the corporation’s managers. They have also prosecuted lawyers, accountants, government regulatory bureaucrats and even printing company employees who had access to public offering documents before they were issued to the public. The SEC defines legal insider trading as corporate insiders – officers, directors and employees – trading securities issued by their own company. When a corporate insider buys or sells his company’s securities, this trading activity must be reported to the SEC, which then discloses this information to the public. Still, even though the trading is disclosed, corporate insiders can only trade their corporation’s securities during certain windows of time when there is no material, non-public information that might affect a buyer or seller’s trading decision. Insider trading is important because it can undermine the integrity of the financial markets. By aggressively monitoring insider trading, the SEC helps maintain confidence that the markets operate fairly for all participants.