Insider trading laws are regulations that prohibit individuals with access to confidential information about a company from using that information to trade in the company’s stock. These laws are designed to protect the integrity of the securities markets and ensure that all investors have access to the same information.
Insider trading laws are important because they help to maintain fair and orderly markets. When insiders are able to trade on confidential information, they can profit at the expense of other investors who do not have access to the same information. This can lead to a loss of confidence in the markets and make it more difficult for companies to raise capital.