Cengage Advantage Books: Business Law 9th Edition by Arnold Goldman ,William Sigismond

Exercise 4

Insider trading is an illegal activity. It is also widely accepted as being unethical. A person guilty of insider trading can gain an advantage over another person and is therefore in violation of federal law. It is often hard to prove; however, using technology and social media as part of the process of identifying this crime, things will be changing.
Questions
1. What is insider trading?
2. When a person engages in insider trading, what federal law is violated?
3. What makes insider trading unethical?