Inside is a way of illegal use of classified information that has an important effect on the value of securities for the purpose of personal enrichment in the stock market. In the United States and Europe, with insider information, this phenomenon is fought as with grave economic crimes and punished with long terms.
The term "insider" originated in the United States in the 1930s and at first did not have a negative connotation. Insiders were people who owned confidential information. However, over time, this information began to be used more and more often for unseemly purposes, or even simply to trade it. And this became the reason for the bankruptcy of many companies both in America and in Europe.
Insider and insider information
Inside information is information that is closed to the general public and can have a significant impact on the stock market or the price of securities. This includes information about the impending changes at the enterprise, about a change in management, about the financial difficulties of the enterprise, about negotiations on a merger or the purchase of large blocks of shares. This is especially valuable information that a limited number of people have access to. However, the ability of this information to bring a lot of money to its owner often pushes insiders to take advantage of this opportunity or sell information to interested parties.
An insider is a person who possesses inside information and uses it to buy or sell large assets in the stock market in order to enrich or manipulate the market. Insiders are often business leaders and senior management, government officials, large shareholders and their proxies.
How do you get inside information
One of the most common types of leakage of valuable information from a company is the negligence or frivolity of responsible employees. Many insiders deliberately give out the necessary information to competitors in order to "annoy" their immediate management. Or they are bought by competitors who want to win the competition with the help of insider. It often comes to the direct introduction of employees into key positions in order to obtain confidential information. The latter, in fact, are already considered industrial spies and the most dangerous criminals, often not vulnerable to internal security services.
Fighting illegal use of insider information is the responsibility of our own security service. It increases the level of personal responsibility of each employee for the preservation of trusted information, calculates and suppresses insiders who trade valuable data. The fight against illegal use of confidential information is becoming very important. According to statistics, the leakage of only 20% of the company's secrets into the right hands can lead to its complete bankruptcy.
