Insider trading is the trading of a
corporation's
stock or other
securities (e.g.
bonds or
stock options) by corporate insiders such as officers, key employees, directors, or holders of more than ten percent of the firm's shares. Insider trading may be perfectly legal, but the term is frequently used to refer to a practice, illegal in many jurisdictions, in which an insider or a related party trades based on material non-public information obtained during the performance of the insider's duties at the corporation, or otherwise misappropriated.
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A criminal offense involving the purchase or sale of shares by someone who possesses 'inside' information about a company's performance and prospects which is not yet available to the market as a whole, and which if available might affect the share price.