Introduction to Insider Trading Training
In this course we will be learning about insider trading, who it can affect, and best practices to stay in compliance with the law. It is important to understand that illegal insider trading is a highly regulated crime that the Securities and Exchange Commission, or SEC, takes very seriously.
What is Insider Trading?
According to SEC Rule 10b-5, the buying or selling of any security of a publicly-traded company while in possession of material, non-public information is known as illegal insider trading. This practice is illegal and can incur potential fines and even a criminal conviction.
Who Is affected by Insider Trading Laws?
Insider trading laws not only apply to Wall Street bankers and employees of publicly traded companies, but can actually affect anyone who trades securities on a public exchange. If you were in a situation where you wanted to make a stock trade of a specific company or even the company you work for, would you know for sure that you weren't breaking insider trading laws?
Let’s learn more about the two different theories of insider trading, and who maintains a fair market.
A main goal of the Securities and Exchange Commission (SEC) is to make sure that publicly traded markets operate fairly and without manipulation. Later in the course, we'll look at how the SEC enforces insider trading laws and the penalties that can occur when there is a violation.
The Misappropriation Theory specifically targets people who do not work with the traded company. These are corporate outsiders who somehow have gained access to Material, Nonpublic Information and make trades based on that information.
The Classical Theory applies to people who work inside an organization that have access to confidential information. This includes employees, directors, or officers of the company.
What does the SEC do?
It is the duty of the SEC regulatory agency to protect investors and maintain a fair and functioning public securities market. The SEC is also responsible for monitoring corporate finance actions within the United States, promoting public disclosure of financial transactions, and protecting against fraudulent practices like market manipulation and illegal insider trading.
The Purpose of the SEC
After the passage of the U.S. Securities Act of 1933 and the Securities and Exchange Act of 1934, Congress established the Securities and Exchange Commission, or SEC. What is its purpose?
Here are some myths to look out for:
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To protect investors and maintain a fair and functioning public securities market.
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To monitor corporate finance actions within the United States.
The most thorough Insider Trading training on the market
EasyLlama’s course on Insider Trading in the workplace uses interactive knowledge checks and real-life video scenarios to engage employees and help them retain important information. Regardless of whether they work for a publicly traded company, everyone who conducts transactions in public markets with the intention of avoiding unintentional or intentional illegal insider trading can benefit from this training.
Helping over 8,000+ organizations create a safer, more inclusive company culture.
The online training course from EasyLlama walks learners through which transactions are prohibited, how to avoid them, and the procedures to follow in order to trade in public marketplaces in an ethically and legally acceptable manner. The course covers:
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