insider trading

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insider trading,

stock market transactions made with knowledge of nonpublic information about corporate activity. In the United States, it has been illegal since 1934. The Securities and Exchange CommissionSecurities and Exchange Commission
(SEC), agency of the U.S. government created by the Securities Exchange Act of 1934 and charged with protecting the interests of the public and investors in connection with the public issuance and sale of corporate securities.
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 regards it as unfair to investors who are not privy to such information. Several insider trading scandals shook Wall Street in the mid-1980s.
References in periodicals archive ?
According to Barclay and Warner (1993), stealth trading would induce ADR return autocorrelation.
One reason may be that in the high-noise period, institutions deliberately divulge their information very slowly over time through stealth trading, making their information advantage less useful for others to predict returns.
Second, the existence of noise in capital markets provides an opportunity for informed institutional investors to exploit their information advantage through stealth trading.