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Questions
What do you mean by insider trading?
What is meant by Insider trading?
Short Answer
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Solution
An insider refers to any individual associated with a company who is likely to have access to confidential, price-sensitive information about the company’s securities that is not publicly available. Directors, promoters, and similar individuals are considered insiders. When these insiders misuse privileged information, which they possess due to their position, to gain personal financial benefits, it is known as insider trading. An example of such conduct is the recent scandal involving the promoters of Satyam Computers.
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