Insider trading

BörseErwachsene

Illegal share trading using non-public information. Example: you know about a takeover before the public and buy shares. Punishable with up to 5 years in prison in Germany.

Insider trading is buying or selling securities on the basis of information that isn't yet known to the public.

Examples:

• A board member knows that the company is going to be taken over (the price will rise) and buys shares beforehand
• An auditor learns about bad quarterly figures before they're published and sells
• A banker tells his wife about an upcoming IPO and she buys shares

Penalties (Germany): up to 5 years in prison and/or a fine. In addition, confiscation of profits (all gains are seized).

Why is it prohibited? Because all market participants should have the same information. Insiders have an unfair advantage at the expense of ordinary investors.

Did you know? Martha Stewart, the famous US TV personality, went to prison for 5 months in 2004 in connection with an insider-trading case. Thanks to an insider tip, she had avoided a loss of just $45,673.

Something missing or could the translation be better?

← Inkasso Insolvenz →

📚 Insider trading understood?

Deepen your financial knowledge with 60 free learning modules and 16 calculators.

📚 To the learning paths →

🧮 Calculators 📖 Glossary

📅 Stand: 17. Juli 2026✔️ Redaktionell geprüftÜber SaveFoxy FAQ Fehler melden? Im Lexikon mitmachen