Is the information from a credible source with access to private company information, or is it simply speculation based on publicly available information? In recent years, insider trading may bring to mind a celebrity such as Martha Stewart. Compare your portfolio performance to leading indices and get personalized stock ideas based on your portfolio. An insider is defined as someone who meets one of two conditions: However, in the case of insider trading, the definition of “insider” expands to include any individual who buys or sells shares of a security based on inside information material to that security’s price that is not public knowledge. Officer Sales $200k+ Past Week (no opt-ex), Officer Sales $500k+ Past Month (no opt-ex), Insider Purchases of Penny Stocks, Past Month, Insider Sales of Penny Stocks, Past Month, Ordnance & Accessories, (No Vehicles/Guided Missiles), Surgical & Medical Instruments & Apparatus, Derivative transaction in filing (usually option exercise), Multiple transactions in filing; earliest reported transaction date and weighted average transaction price, Sale of securities on an exchange or to another person, Sale of securities on an exchange or to another person (after option exercise), Payment of exercise price or tax liability using portion of securities received from the company, Purchase of securities on an exchange or from another person. The information presented in this brochure will help you understand – and distinguish – legal and illegal insider trading. In these cases, the trades have to be properly disclosed to the SEC (more on that below). Form 5 is used to declare earlier transactions or those that have been deferred. This, however, is not illegal because all consumers have the same access to the information; it’s just a question of whether or not they are willing to pay for it. Examples of people who would be considered insiders include a company's executive officers, its board of directors, and its major shareholders. U.S. Securities and Exchange Commission. However, the sale was made based on a tip she received about Waksal selling his shares, which was not public information. Real-time insider trading alerts notify users by email when user-defined criteria are met. In fact, it is shown above that the more the market drops, the more insider buyers it attracts. Insider Officer Cluster Trading (Past 2 Weeks), the Securities and Exchange Commission (SEC). All rights reserved. For the most current information, investors can go to the SEC’s EDGAR (Electronic Data Gathering, Analysis, and Retrieval) database. The practice of allowing a select few groups of investors to profit by letting them buy or sell a stock or security based on material information that is not available to the general public is, and always be considered, illegal in the eyes of the Securities & Exchange Commission. the tipper). For example, if many insiders purchase more shares of a company, they may think that the company will have strong future earnings and that the share price will increase in the near future. The trading activity has to occur before the inside information becomes available to the general public. Get daily stock ideas top-performing Wall Street analysts. However, just being presented with information does not make an individual guilty of insider trading. Information on insider trading activity is available on many financial websites; however, in some cases, the filings do not appear right away. It does not matter how the material nonpublic information was received or if the person is employed by the company. Never before has monitoring insider trading become so easy. "SEC Charges Martha Stewart, Broker Peter Bacanovic with Illegal Insider Trading." Due to SEC regulations, insiders (company's officers, directors and any 10% beneficial owners of a public company) are prohibited from buying and selling their own company securities during certain blackout periods. (See link in page insider trading resources). Authorities said Kennedy gave fellow University of Washington alumni Maziar Rezakhani information on Amazon's 2015 first quarter earnings before the release. From Chart 2 to Chart 7, we show the unique insider buyers by month and the seasonally adjusted figures in each of the years from 2006 to 2011.