Buying or selling corporate stock by a corporate officer or other insider on the basis of information that has not been made public. It is the trading of a corporation's stock or other securities (e.g. bonds or stock options) by individuals with potential access.
Illegal trading by anyone considered an insider who has access to non-public information, and who attempts to profit from that knowledge.
A company insider is someone who has access to the important information about a company that affects its stock price or might influence investors' decisions.
Only by researching right reason that why the peoples selling the stocks in a particular time, after that we have to decide to buy or sell the share. So that we can know the maximum techniques used by the insider trading.
If the insider is illegal (the law broken), according to the level of illegal the person will be punished like fining, dismissed from the position if he in board of directors & also they will be arrested.
Insider traders are tracked with a special school of investigation. In that the inside trader have to submit their trade record to the investigators. Recently there was an illegal inside trading done by rajarathnam. The following article will clearly explains about the case.
I am $200 million worth: Arrest for Insider trading.
Born into a family of well-to-do Tamils in the Sri Lankan capital of Colombo, RajaRathnam is one of the largest investors on the Colombo Stock Exchange. Into the hedge fund he was among six people charged in a $20 million insider trading scheme by the U.S. Securities and Exchange Commission. He along with five was accused of insider trading crimes and earning millions of dollars in illegal profits.
Tamil-Born hedge fund billionaire is the 236th richest American according to Forbes 2009 Magazine. And also 232th Richest American by Forbes 2008. Raj's $1.3billion makes him as 559th richest person in the world by Forbes. A Hedge Fund is an Investment fund open to a limited range of investors that undertakes a wider range of investment and trading activities than long-only investment funds. A private investment fund or pool that trades and invests in various assets such as securities, commodities, currency, and derivatives. Frequently structured as private investment partnerships, hedge funds are not easily defined by one particular investment strategy. Galleon Group was one of the largest Hedge fund management firms in the world before the announcement of the firms' closure on October 2009.
Rajaratnam traded in 2006 and 2007 on leaks from insiders at Polycom, Buying or selling corporate stock by a corporate officer or other insider on the basis of information that has not been made public. It is the trading of a corporation's stock or other securities (e.g. bonds or stock options) by individuals with potential access. A Moody's analyst offered news about Hilton, and the Market Street Partners source provided tips about Google, prosecutors said. Rajaratnam earned $12.7 million on the leaks and gave a confidential government informant inside information on other companies in return.
At a court hearing on October 16'2010 U.S. Magistrate Judge Douglas Eaton set Rajaratnam's bail at $100 million, to be secured by $20 million in assets and guaranteed by his wife and four others. Rajaratnam told court officials after his arrest that he was worth $200 million.