In the past, many traders reported getting into significant losses due to insider trading. Insider trading is the illegal trading on the stock exchange market to one’s own advantage after having access to confidential information about the same trade.
Before it came to the limelight and the government laid strong principles against it, many companies used insider trading to benefit. Insider trading, by all means, is a breach of fiduciary duty since the company trades the stock knowing very well that people out there will bear a lot of losses to their advantage. Companies should therefore ensure that they do something to stop the insider buying stocks.
How can companies avoid insider trading?
1. Restrict any risks in the trade
In most cases, confidential information is accessible to employees, the board, or the people who spend most of the time in your company. These are the same people who …