Posted by Alumni from The Conversation
December 19, 2024
In fact, we found that after a company is hit with an insider-trading indictment, it generally produces more patents ' which in turn are cited more by other patents ' than it did before the indictment. It's also likely to outperform other companies ' at least in terms of innovative activities and operating performance ' that haven't faced any such charges. Insider trading is when a director or employee of a company trades their public stock or another security based on important or 'material' information about that business. While people often wrongly think all insider trading is against the law, it's actually legal for insiders to trade stocks and earn profits based on information that's also available to the public. What's illegal is trading based on 'nonpublic,' or secret, information. The idea is that in a fair and transparent market, all investors should have access to the same information. But while insider trading restrictions are intended to help investors, a growing body of... learn more
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