What is the dedicated trading?
'Trading Insider Trading' can apply to two separate financial transactions-one of them is perfectly legal and the second is subjected to massive civil fines and possible prison. The legal form of dedicated persons trading includes the sale of securities or shares of the company officials or shareholders who own more than 10% of the company. The President of the Company can sell his shares if, for example, reports of the upcoming bankruptcy in Wall Street Journal are announced. Of course, the chairman of the company is considered an initiate, but his decision to sell his shares was based on information that any other shareholder could find out.
illegal form of dedicated persons involves information that other shareholders are not easily accessible. Whenever an individual becomes a major shareholder or a manager of an officer in a company, AG or Onaree must maintain certain events absolutely secret, even if these events could report a financial disaster forshareholders. The Security and Stock Exchange Commission (SEC) monitors signs of dedicated trading whenever societies notice huge losses or profits.
For example, if the vice president of drug society learned that food and drug administration would not approve the latest treatment of his diabetes company, he could not legally sell his own shares or advise his friends and family to sell their shares. The decision to sell shares in a company that is going to receive devastating messages would be based on privileged information. The vice -chairman of this company and anyone he told about the FDA decision could be charged with dedicated trading.
The insightful persons are not a new crime of white collars; The use of privileged information for financial profit has since been a co -operation of shares trading. Most shareholders can make a decision to buy or pBased on everything from the strong Hunch to the latest trendy pop culture. However, managers and main shareholders are obliged to avoid using dedicated persons, even if it means personal financial losses. Without rigid sanctions for dedication trading, executives could unfairly benefit from their personal knowledge everywhere. Regular shareholders without accessing these information could not sell their shares in an unsuccessful company or reap the benefits of a company prepared for success.