What is insider trading?
FOX Business' Charlie Gasparino says a government probe of congressional insider trading following the coronavirus briefing may be heavily focused on Sen. Richard Burr, R-N.C., as the Department of Justice and the U.S. Securities and Exchange Commission allegedly believe the charges against other senators are less likely to move forward.
Insider trading is the illegal act of buying or trading stocks or securities based on information not known or available to the public.
The U.S. Securities and Exchange Commission describes it generally as the “buying or selling a security, in breach of a fiduciary duty or other relationship of trust and confidence, on the basis of material, nonpublic information about the security.”
While it commonly refers to employees at large, publicly traded companies, federal law enforcement is not limited in prosecuting company “insiders,” but can also take action against:
- People who work for banking, law, printing and brokerage firms, who obtained information in the process of performing their services,
- Government employees,
- “Public intelligence consultants” who might receive the “insider” information from government officials or employees,
- And “Other person who misappropriated, and took advantage of, confidential information from their employers, family, friends, and others.”
SENATORS ACCUSED OF INSIDER TRADING AMID CORONAVIRUS PANIC
According to the SEC, someone can be accused of insider trading, or related violations, for "tipping" someone off to confidential securities information, “securities trading by the person ‘tipped,’ and securities trading by those who misappropriate such information.”