There are many controversies surrounded by the cases of Insider trading. Many think that insider trading should be allowed, while other thinks that insider trading is Illegal and strict steps should be taken on the person that involve in Insider trading activities.
What is Insider Trading?
Insider trading may be defined as the financial gain by one or more person who possesses some inside information which may be a secret and public at large does not know about it. If these people who know such inside information start trading the securities of that company prior to that information made public and get the handsome profit out of it is said to be in the insider trading activity.
There is a principal which govern the trading market called Fair capital market. Under this principal no one should have the extra advantages, like some inside information which public does not know. Here large Investors are at the loosing end and if these types of activities go unchecked then people soon lose their interest in stock market. The stock market credibility is seriously challenged if Insider trading is not made illegal.
It is also found that the information which affects the stock prices of a particular company was stolen or passed on to others for the clear financial gain which is also the violation of company's rule.
