Question

Insider trading is correctly described by which statements?

A) It involves buying or selling a security based on material nonpublic information.
B) It is legal if the individual is not an employee of the company.
C) It is a common practice in the financial industry.
D) It is a violation of securities laws and regulations.

Answer 1

Insider trading involves buying or selling a security based on material nonpublic information, and it is a violation of securities laws and regulations. It is illegal regardless of whether the individual is an employee of the company or not.

Step-by-step explanation:

Insider trading refers to the buying or selling of a security based on material nonpublic information. It is illegal, regardless of whether the individual is an employee of the company or not. Insider trading is considered a violation of securities laws and regulations. It is not a common practice in the financial industry as it is strictly regulated by the Securities and Exchange Commission (SEC) to maintain fairness and protect investors.