The restriction on insider trading What is insider trading? Insider trading is usually associated with illegal conduct. However, the term actually includes both legal and illegal conduct. The legal version is when corporate insiders of a public company, eg officers, directors, and employees, buy and sell stock in their own companies. When corporate insiders of a US publicly traded company trade in their own securities, they should report their trades to the SEC. More information about this reporting obligation can be found in Forms 3, 5 and 5 in the Fast Answers databank of the Securities and Exchange Commission (SEC). Illegal insider trading is the buying or selling of a security, in breach of a fiduciary duty or other relationship of trust and confidence, while in possession of material, nonpublic information about the security (MNPI). Other violations of insider trading violations include 'tipping' such information, securities trading by the person 'tipped', and securities trading by those who misappropriate such information. Because insider trading undermines investor confidence in the fairness and integrity of the securities markets, the SEC has long treated