insider trading


Definition of insider trading

: the illegal use of information available only to insiders in order to make a profit in financial trading

Examples of insider trading in a Sentence

Recent Examples on the Web

Read More The trial court in the northeastern city of Dalian convicted Mr. Ma of receiving bribes, coercing others into making commercial trades, and engaging in insider trading, according to an online statement published by the court. Chun Han Wong, WSJ, "Former Chinese Official Linked to Exiled Tycoon Gets Life in Prison," 27 Dec. 2018 Companies often don’t repurchase shares in the weeks before reporting earnings to avoid accusations of insider trading, removing a key source of demand for shares that has lifted major indexes in recent years. Amrith Ramkumar, WSJ, "Buyback ‘Blackout’ Period Marks Another Possible Hurdle for Stocks," 28 Mar. 2019 Kendricks also played three games, then served an eight-game NFL suspension for the insider trading charge. Bob Condotta, The Seattle Times, "Seahawks linebacker Mychal Kendricks’ sentencing hearing pushed back again," 25 Mar. 2019 Bondholders say Spanish-language broadcaster LBI Media Inc.’s bankruptcy-exit plan is a product of insider trading and fraud, a violation of the rules of engagement in a market where aggressive trades are the norm. Peg Brickley, WSJ, "Bondholders Accuse LBI, HPS of Insider Trading in Debt," 19 Mar. 2019 But in any case, it's gone now, another blow to Starbreeze in a year that's also included insider trading allegations and a CEO who by all accounts has disappeared off the face of the earth. Hayden Dingman, PCWorld, "This week in games: New Dune games, Phoenix Wright on PC, and Borderlands 3 rumors," 1 Mar. 2019 The New York Republican was charged earlier this week with insider trading. Fox News, "Gutfeld: The more you damn Donald Trump, the better he gets," 12 Aug. 2018 The Leissner guilty plea is the biggest black eye for a Goldman partner since 1989, when executive Robert Freeman was led off the trading floor in handcuffs, later convicted of a crime related to insider trading. Bradley Hope, WSJ, "Justice Department Charges Ex-Goldman Bankers in Malaysia 1MDB Scandal," 1 Nov. 2018 Kendricks was suspended for pleading guilty to a felony insider trading charge. Bob Condotta, The Seattle Times, "K.J. Wright, Ed Dickson on track to make season debut Sunday; Seahawks announce jersey patch honoring Paul Allen," 26 Oct. 2018

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'insider trading.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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First Known Use of insider trading

1966, in the meaning defined above

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Statistics for insider trading

Last Updated

24 Jun 2019

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The first known use of insider trading was in 1966

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More Definitions for insider trading

insider trading


Financial Definition of insider trading

What It Is

Insider trading refers to the trading of securities by corporate insiders such as managers or executives.

How It Works

Insider trading can be legal or illegal depending on if the information used to base the trade is public.

Individuals who engage in illegal insider trading attempt to benefit from trades based on information about a company not yet made public. For example, an executive of Company XYZ who purchases shares of the company based on a pending merger announcement is engaging in illegal insider trading.

However, once Company XYZ has announced the merger publicly, insiders may legally trade the shares based on the information.

Insider transactions must be reported to the Securities and Exchange Commission (SEC) via Form 4.

Why It Matters

Some investors follow legal insider trading because they believe insiders have a better insight to the financial health of a company.

For example, a CEO buying shares of his company conveys confidence in the future of the business.

Meanwhile, illegal insider trading can lead to fine and even imprisonment for the guilty party.

Source: Investing Answers

insider trading


English Language Learners Definition of insider trading

finance : the illegal activity of buying and selling a company's stocks while using secret information from a person who works for the company

insider trading


Legal Definition of insider trading

: the illegal use of especially material inside information for profit in financial trading — see also tippee

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