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1)why insider dealing is illigal i dont understand sir.
and why the shareholders put the price of the share? Isnt it approved by the Stock or smth?
2)So insider dealing is when directors trade their own shares? and why its the market’s best efficiency form?
Obviously, the reason insider trading is illegal is because it gives the insider an unfair advantage in the market, puts the interests of the insider above those to whom he or she owes a fiduciary duty, and allows an insider to artificially influence the value of a company’s stocks.
Shareholder price is approved not approved by the stock exchange or shareholders.
The performance of a business defines the share price plus other factors such as current economy,stability etc in which the entity operates.
Not just the directors any employee or person who have access to the non public information because of his duties or role in the company.If such a person uses this information for his/her own advantage then it,s called a insider trading.myacca1990: please don’t answer in this forum, because it is the Ask the Tutor forum (but please do help people in the other F9 forum).
rustamrakhmatov27: Share prices are not approved by anyone – they are determined by shareholders. The share price is the amount that shareholders are prepared to pay and are based on how well they expect the company to do in the future. The ideal position would be that shareholders knew everything about the company’s plans so then they really would know what price to value the shares at. In practice they don’t have all the information – the market is semi-strong efficient, which means that people who do have the information (e.g. the directors) could make unfair profits from buying and selling the shares. That is why it is illegal for them to do so.
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