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Essay / The pros and cons of insider trading - 1313
Trading restrictions: This means preventing insiders from trading for a certain period of time, i.e. before company announcements, takeovers , etc. Insiders are restricted from trading securities for certain specified periods whether directly or indirectly for the purpose of preventing them from realizing personal gains and benefiting from the material information they possess. Even after the information is made public, they may be restricted from trading the securities for a certain period and the trading window will remain closed to them during this period. This measure helps ensure that material information that could constitute an advantage for insiders is actually first disclosed to the public. An even stricter measure would be to require insiders to trade the securities only through a particular trading window that is monitored and managed by the company or security.