Insider Trading

What this video covers

• What material nonpublic information (MNPI) means, and why a reasonable person standard determines whether a tippee "should have known" the information was confidential
• Why being a corporate insider is legal but trading specifically based on MNPI violates the SEC antifraud rule, prosecuted under the same authority as market manipulation
• How tipper-tippee liability chains work, including why outsiders like taxi drivers or neighbors can be fully liable even without any corporate role
• Where duties of trust or confidence arise, from family relationships to confidentiality agreements to patterns of sharing secrets
• When a pre-planned written trading plan provides an affirmative defense, and why altering it to exploit new MNPI destroys that protection
• Why the SEC civil penalty is treble damages (3x profit gained or loss avoided), and why controlling persons including supervisors and firms face minimum $1 million penalties
• What information barriers (Chinese walls) require from broker-dealers, and why written supervisory procedures are mandatory rather than optional