Re: Can someone please explain.
<quote>Why insider trading is illegal?
Surely as long as you arent manipulating the market in some way you've done nothing wrong..</quote>
I will second the suggestion about bring a clue bat.
Since you fail to comprehend what is wrong, then try to comprehend this:
Publicly traded companies (at least in the USofA) are supposed to communicate matters that affect current and potential stockholders in an equal manner. IO(simple)W - do not play favorites.
When you act using knowledge from privileged sources, not known to the general public about an event which may have a material effect on a company; you are committing insider trading.
The wrong is the appearance of fraud.
Example ABC company is about to announce disastrous quarterly earnings, and you find out right before the public announcement, and get rid of your holdings. The announcement is made, and the per share price drops 20%. YOU knew that there was bad news looming, and got out, but whoever bought those shares, didn't, and you perpetuated a fraud on them. You """pat yourself on the back""" for "getting out in time". THAT is the wrong here
Another example, but in reverse: ABC corp has decided to buy out XYZ corp for $25/share. XYZ corp is currently trading at $15/share. Knowing that a buyout is imminent, you buy up all available shares based upon this privileged knowledge. The deal gets announced, and you make a killing on the upside. THAT is the wrong here
Now, where did I leave the old Louisville Sluggertm.