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insider trader

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insider trading

–noun
the illegal buying and selling of securities by persons acting on privileged information.

Origin:
1965–70


insider trader, noun
Dictionary.com Unabridged
Based on the Random House Dictionary, © Random House, Inc. 2009.
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Cultural Dictionary

insider trading

The unlawful practice of using information that comes from a source “inside” the business but is not available to the general public to trade on the stock market. This activity is prohibited by law and is policed by the Securities and Exchange Commission.

Note: In the mid-1980s, several revelations of insider trading rocked Wall Street.
The American Heritage® New Dictionary of Cultural Literacy, Third Edition
Copyright © 2005 by Houghton Mifflin Company.
Published by Houghton Mifflin Company. All rights reserved.
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Financial Dictionary

insider trading

The illegal buying or selling of securities on the basis of information that is generally unavailable to the public. An example is the purchase by a director of shares of his or her firm's stock just before the release of surprisingly good earnings information.

Case Study

In November 2001 the Securities and Exchange Commission charged 15 individuals with insider trading in the shares of Nvidia Corporation, a California maker of graphics chips. According to the SEC, in March 2000 Nvidia's president used e-mail to inform employees the firm had won a major contract to supply chips for Microsoft Corporation's new Xbox video game system. News of the contract was not announced to the public until five days following the employee e-mail. The time lag allowed the 15 individuals11 employees plus 4 people tipped by the employeesto profit by purchasing Nvidia shares prior to the public announcement of the contract. The case was relatively unusual in that the individuals charged with insider trading were low-level employees rather than high-level executives.

Wall Street Words: An A to Z Guide to Investment Terms by David L. Scott.
Copyright © 2003. Published by Houghton Mifflin.
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Legal Dictionary

Main Entry: insider trader
Function: noun
: one that engages in insider trading

Main Entry: insider trading
Function: noun
: the illegal use of esp. material inside information for profit in financial trading —see also TIPPEE
Merriam-Webster's Dictionary of Law, © 1996 Merriam-Webster, Inc.
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