Mention the words “insider trading,” i.e., the improper buying or selling of securities while in possession of material nonpublic information (MNPI), and the mind might begin to conjure nail-biting clandestine information gathering schemes on the TV show Billions or the more mundane image of a hedge fund boss working the phones and slowly schmoozing and pressuring MNPI out of executives at publicly traded companies. These images are not surprising given that the SEC’s insider trading crackdown over the last decade, in the wake of SEC v. Galleon Management, LP, has mainly focused on illicit trading by corporate outsiders like securities traders, high-profile hedge funds, and financial industry professionals like lawyers and investment bankers.

There is, of course, also insider trading committed by company insiders, e.g., officers, directors, or large stockholders with access to MNPI. This type of insider trading most commonly involves an insider dumping stock just before bad news becomes public. Indeed, just days ago the SEC charged Apple’s former global head of corporate law with using MNPI to sell nearly all his Apple stock at opportune times and avoid over $300,000 in losses. Shockingly, according to the SEC’s press release, the charged attorney had been responsible for “review[ing] and approv[ing] the company’s insider trading policy and notify[ing] employees of their obligations under the insider trading policy around quarterly earnings announcements.”

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