ABSTRACT
Insider trading, also called insider dealing, consists of the trading of a public company’s stock or other securities such as bonds or stock options based on material, non-public information about the company. For this purpose, a public company is one whose stocks or shares are listed on a public exchange such as the London Stock Exchange or the New York Stock Exchange. In this chapter we consider what insider trading means for any pubic company, i.e. a company whose shares are listed on a stock exchange. In many countries some kinds of trading based on insider information are illegal while others are perfectly in order. Illegal trading is regarded as unfair to investors who do not have access to the same kind of information because the investor with insider information could potentially make a large profit as a result. The rules governing insider trading are complex and vary from country to country.
