Inside information

Inside information is intelligence about the internal operations and finances of an organization that is only known to its employees and directors. This information has not been distributed to anyone outside the company. The Securities and Exchange Commission does not allow anyone with this information to trade the securities of the business based on it. Doing so is considered a criminal offense, since trading based on inside information gives a person an unfair advantage over the general public. Examples of situations that may be considered inside information are:

  • The release of a new product
  • The recall of an existing product
  • Discussions to acquire another company
  • The spinoff of a subsidiary
  • The existence of a lawsuit
  • The settlement of a lawsuit

Related Courses

Investor Relations Guidebook 
Public Company Accounting & Finance