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Answer Posted / sharad garg
When a person gets the information about the internal
decisions of the management of the company, which may
include information regarding dividend declaration, or
expansion project etc. even before they are being
officially proclaimed through company spokesperson, and
trades the shares of that company in a stock exchange, then
such type of trading is callled as Insider trading.
It is illegal as the stock exchange is allowed to operate
on market speculations and not on the basis of inside
information about the company.
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