The buying or selling of securities based on material nonpublic information, in violation of a duty of trust or confidence. Insider trading also includes tipping (sharing MNPI with others who trade on it).
Federal penalties include disgorgement, civil fines up to three times profits, and criminal penalties up to 20 years imprisonment. Fund managers must adopt insider trading policies and train personnel to identify and handle MNPI.
This article is for informational purposes only and does not constitute legal advice. Consult qualified professionals for guidance specific to your situation.