Insider Trading – Investor News Index

Category: Insider Trading

From a regulatory perspective, illegal Insider Trading is the purchase or sale of a security executed in breach of a fiduciary duty or other relationship of trust and confidence while in possession of material, non-public information regarding that security or issuer.

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Insider Trading Explained

August 2, 2026

Review the Explanation

Promptly reporting misconduct to regulatory authorities ensures bad actor accountability, helps safeguard investors and consumers, and helps preserve financial market stability.

What Is Insider Trading?

Regulatory bodies like the U.S. Securities and Exchange Commission (SEC) classify insider trading as a form of securities fraud primarily governed by Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5. It centers on the illegal practice of utilizing confidential, market-moving information—information not available to the general investing public—to gain an unfair advantage when trading financial instruments.

How It Manifests

Insider trading typically manifests through three main legal theories:

Classical Theory: Occurs when corporate insiders (such as executives, directors, or employees) trade their own company’s securities using confidential corporate developments (e.g., earnings reports, mergers, product approvals) before public disclosure.
Misappropriation Theory: Applies when individuals who are not corporate insiders misappropriate confidential information entrusted to them by a source (e.g., lawyers, accountants, consultants, or family members) and trade on that information for personal gain.
Tipper/Tippee Liability: Occurs when an insider (the tipper) conveys non-public material information to an outsider (the tippee). If the tippee trades on the tip knowing—or having reason to know—that the information was disclosed in breach of a duty, both the tipper and tippee face regulatory fraud liability.

Who Is Impacted

Insider trading undermines the fundamental integrity of capital markets, affecting several key groups:

Retail and Institutional Investors: Everyday market participants trade at a structural disadvantage, buying or selling assets without knowing that another party holds exclusive, price-altering information.
Financial Markets: Public confidence in market fairness erodes, leading to reduced liquidity, inflated transaction costs, and a higher cost of capital for corporations.
Corporate Issuers: Publicly traded companies suffer severe reputational harm, potential stock volatility, and internal operational disruptions when key staff or partners are involved in enforcement actions.

Consequences from Regulators

Enforcement agencies and criminal authorities employ severe civil and criminal penalties to deter insider trading:

Civil Enforcement (SEC):

Disgorgement: Mandatory forfeiture of all illicit profits made or losses avoided.
Civil Fines: Financial penalties of up to three times the profit gained or loss avoided (treble damages).
Bar Orders: Injunctions permanently banning individuals from serving as officers or directors of public companies, or from working in the securities industry.

Criminal Prosecution (DOJ):

Prison Sentences: Federal imprisonment of up to 20 years per criminal count.
Criminal Fines: Fines up to $5 million for individuals and up to $25 million for corporate entities.
Asset Forfeiture: Seizure of assets derived directly or indirectly from the illegal trading activity.

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Report Scams and Fraud

July 1, 2026

Review the Agencies

Reporting misconduct to the appropriate oversight body is a critical step in holding bad actors accountable, enforcing consumer protections, and safeguarding market integrity. While federal agencies possess specialized jurisdictions to address systemic or interstate violations, state attorneys general play a vital parallel role by enforcing state-level consumer protection laws, investigating local fraud, and prosecuting unfair, deceptive, or trade-prohibited practices.

FTC

The Federal Trade Commission serves as the primary federal agency responsible for safeguarding consumers and enforcing civil antitrust laws. Empowered principally by Section 5 of the FTC Act, the agency targets unfair or deceptive practices by investigating misleading advertising, corporate fraud, identity theft, and privacy violations. Alongside its consumer protection mission, the FTC promotes fair market competition by scrutinizing corporate mergers, preventing monopolistic conduct, and cracking down on anticompetitive trade practices.

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Access the FTC Report Fraud Portal

CFPB

The Consumer Financial Protection Bureau regulates consumer financial products and services to ensure fair, transparent, and competitive financial markets. Established under the Dodd-Frank Act, the CFPB oversees banks, credit unions, mortgage servicers, payday lenders, and credit reporting agencies. The bureau enforces federal consumer financial laws, supervises financial companies, monitors consumer complaints, and protects individuals from predatory lending and deceptive financial practices.

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Access the CFPB Complaint Portal

SEC

The U.S. Securities and Exchange Commission regulates the nation’s securities markets and protects investors by promoting fair, orderly, and efficient capital markets. The SEC oversees public companies, stock exchanges, investment advisers, and mutual funds, enforcing compliance with corporate disclosure laws. The agency investigates securities fraud, accounting irregularities, market manipulation, insider trading, and Ponzi schemes through its Division of Enforcement.

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Access the SEC Tips, Complaints and Referrals (TCR) Portal

CFTC

The Commodity Futures Trading Commission regulates the U.S. derivatives markets, including futures, options, and swaps contracts across commodities, financial indices, and digital assets. The CFTC works to foster open, transparent, and financially sound derivative markets while protecting market participants against fraud, manipulation, and abusive trading practices. Its enforcement division monitors trading activity to maintain integrity in physical commodity and financial markets.

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Access the CFTC Reporting Portal

FINRA

The Financial Industry Regulatory Authority is an independent, non-governmental self-regulatory organization (SRO) authorized by Congress to oversee U.S. broker-dealers and registered representatives. FINRA writes and enforces rules governing broker-dealer conduct, conducts routine regulatory examinations, tests financial industry professionals, and monitors trading activity across equity and options markets to ensure investor protection and market fairness.

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Access the FINRA Investor Complaint Center

IC3

The Internet Crime Complaint Center is a joint partnership between the Federal Bureau of Investigation (FBI) and the National White Collar Crime Center that serves as the central focal point for receiving and analyzing cyber-enabled criminal complaints. IC3 gathers intelligence on internet fraud, ransomware attacks, business email compromise (BEC), identity theft, and online financial scams, referring actionable leads to law enforcement agencies nationwide.

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Access the FBI Internet Crime Complaint Center

FinCEN

The Financial Crimes Enforcement Network is a bureau of the U.S. Department of the Treasury that collects and analyzes financial transaction data to combat domestic and international money laundering, terrorist financing, and other financial crimes. FinCEN enforces the Bank Secrecy Act (BSA), requiring financial institutions to maintain anti-money laundering compliance programs and file Suspicious Activity Reports (SARs) to track illicit financial flows.

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Access the FinCEN Reporting Contact Page

FCC

The Federal Communications Commission regulates interstate and international communications by radio, television, wire, satellite, and cable across the United States. In its consumer protection capacity, the FCC enforces regulations against illegal robocalls, caller ID spoofing, telemarketing fraud under the Telephone Consumer Protection Act (TCPA), and unauthorized carrier switching (“slamming” and “cramming”).

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Access the FCC Consumer Complaint Center

CBP

U.S. Customs and Border Protection is responsible for enforcing trade laws, protecting intellectual property rights, and facilitating lawful international trade at U.S. borders. CBP investigates commercial trade fraud, anti-dumping violations, illegal transshipment, import duty evasion, and the importation of counterfeit goods or unsafe merchandise that pose economic or physical harm to consumers.

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Access the CBP e-Allegations Portal

NASAA

The North American Securities Administrators Association is an international investor protection organization consisting of state, provincial, and territorial securities regulators across the U.S., Canada, and Mexico. NASAA coordinates state-level securities regulation, supports local enforcement actions against investment fraud, protects main street investors, and assists individuals in contacting their local state securities administrator.

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Access NASAA State Regulator Directory

NAAG / State AGs

State Attorneys General serve as the primary legal officers of U.S. states and territories, enforcing state consumer protection statutes, investigating local deceptive trade practices, and prosecuting intrastate business misconduct. The National Association of Attorneys General (NAAG) provides a national directory connecting citizens directly to their respective state AG enforcement divisions to file local fraud complaints.

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Access NAAG Find My State Attorney General Directory

Page Notes:

FINRA is a Registered Trademark of the Financial Industry Regulatory Authority, Inc.
NASAA is a Registered Trademark of the North American Securities Administrators Association.
NFA is a Registered Trademark of the National Futures Association.
NAAG is a Registered Trademark of the National Association of Attorneys General

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