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Insider Trading

Buying or selling a company's stock when you know important information about the company that has not been made public and may affect its stock price when it is announced. Insider trading is illegal. Insider tipping (telling others about secret stock-price-moving information) is also illegal.

The laws of insider trading and tipping apply to everybody. They do not apply only to company insiders or executives, though their positions tend to put them at more risk than ordinary employees. Pursuing insider-trading violations is a high priority of the Securities and Exchange Commission (SEC), which enforces US securities law. To prevent insider trading by employees and executives, a company may impose blackout periods during which people within the company cannot trade.

For details on insider-trading prevention and compliance, see the sections SEC Law: Insider Trading and SEC Law: Rule 10b5-1 Trading Plans.

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