Do's and Don'ts: Insider Trading
The following illustrates do's and don'ts of insider trading and securities law
- DO remember that it is a federal crime to trade securities based on "INSIDE INFORMATION" - information you learn about your company or a closely allied company which is not generally available to the public, and which could cause the security's price to change if it became known.
- DO keep all insider information confidential.
- DO check your company's trading policies, or speak with a company attorney, before trading in your company's or a closely allied company's securities.
- DO keep up to date with how trading laws and your company's trading policies apply to your position in the company, especially if you're an officer or director.
- DON'T ever trade securities on inside information.
- DON'T act on someone else's "hot tips" that might be based on inside information-it's just as illegal as trading on inside information you've learned about your own company.
- DON'T tell anyone inside information, not even family.
- DON'T "just recommend" a trade, even without giving a reason, based on inside information.
- DON'T give out untrue or misleading information that others might think is an insider tip.
- DON'T look for clever ways to trade on inside information. The U.S. government and the exchanges have many more clever ways of catching inside traders.