It is a kind of dealings in company shares by persons who, by their official positions, have access to privileged information which information they use for their own advantage at the expense of those who deal with them.


For example, this may occur where some management staff of a company prompt some shareholders to dispose of their shares because of confidential information at their disposal which forecasts likely appreciation in the values of shares. In this case, they may buy shares at cheap prices while they hope to sell at higher prices when the forecast materializes.
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