The Insider Trading Sanctions Act, the Insider Trading and Securities Fraud Enforcement Act and the Regulation Fair Disclosure rule were all passed in an effort to prevent insider trading.

Question

The Insider Trading Sanctions Act, the Insider Trading and Securities Fraud Enforcement Act and the Regulation Fair Disclosure rule were all passed in an 	effort to prevent insider trading.

Quizplus · Accepted Answer

These three laws and regulations were indeed implemented to prevent insider trading. The Insider Trading Sanctions Act (1984) increased penalties for illegal insider trading and required companies to implement compliance systems. The Insider Trading and Securities Fraud Enforcement Act (1988) expanded the scope of insider trading violations and increased penalties for securities fraud. The Regulation Fair Disclosure rule (2000) requires companies to disclose material information to all investors at the same time, to prevent selective disclosure to insiders.