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Insider Trading"Insider merchandise" is a term that most investors acquit heard and usually associate with illegal conduct. But the term real includes both legal and illegal conduct. The legal version is when corporate insidersofficers, directors, and employees bribe and sell stock in their own companies. When corporate insiders trade in their own securities, they must report their trades to the SEC. For more instruction about this part of insider workplace and the reports insiders must file, please read "Forms 3, 4, 5" in our solid Answers databank.Illegal insider craft refers generally to buying or selling a security, in breach of a fiduciary duty or other(a) relationship of trust and confidence, while in possession of material, nonpublic information about the security. Insider trading violations may also include "tipping" such information, securities trading by the somebody "tipped," and securities trading by those who misappropriate suc h information.Examples of insider trading cases that have been brought by the SEC are cases againstCorporate officers, directors, and employees who traded the corporations securities after learnedness of significant, confidential corporate developments Friends, business associates, family members, and other "tippees" of such officers, directors, and employees, who traded the securities after receiving such information Employees of law, banking, brokerage and printing firms who were given such information to erect services to the corporation whose securities they traded Government employees who learned of such information because of their employment by the government and Other persons who misappropriated, and took advantage of, confidential information from their employers. Because insider trading undermines investor confidence in the fairness and integrity of the securities markets, the SEC has treated the catching and prosecution of insider trading violations as one of i ts enforcement priorities.The SEC adopted new(a) Rules 10b5-1 and 10b5-2 to resolve two insider trading issues where the courts have disagreed. Rule 10b5-1 provides that a person trades on the basis of material nonpublic information if a dealer is "aware" of the material nonpublic information when making the purchase or sale. The regulate also sets forth several affirmative defenses or exceptions to liability. The rule