The illegal activity of using insider information for personal gain is considered a(n):
A) manipulative and deceptive practice.
B) honest approach to trading.
C) practice of forgery.
D) mandatory civil rights encroachment.

Question

Quizplus · Accepted Answer

Insider trading, or using confidential information to make profitable securities transactions, is considered a manipulative and deceptive practice that undermines the integrity of financial markets. It is illegal, as it gives an unfair advantage to those who possess the non-public information compared to other investors who are unaware of it. The Securities & Exchange Commission (SEC) strictly regulates insider trading to maintain market transparency and protect investors from fraudulent practices. Options B, C, and D are incorrect as they do not accurately describe insider trading.

The Illegal Activity of Using Insider Information for Personal Gain