Insider trading provides the information needed for the securities market to operate fairly and efficiently.

Question

Quizplus · Accepted Answer

Insider trading refers to the practice of using non-public information for trading purposes, which gives an unfair advantage to insiders and disadvantages outsiders. This goes against the principle of a fair and efficient market, where all participants have access to the same information. Therefore, insider trading can undermine market integrity and investor confidence.

Insider Trading Provides the Information Needed for the Securities Market