Insider trading refers to the buying or selling of a publicly-traded company’s stock or other securities based on non-public, material information about the company. This practice is considered illegal and unethical, as it gives an unfair advantage to those who have access to confidential information, potentially leading to significant financial gain or losses. Insider trading can occur when corporate executives, employees, or other individuals with insider information, such as board members and major shareholders, trade shares based on their knowledge before the information is made available to the general public. Regulatory bodies, such as the Securities and Exchange Commission (SEC) in the United States, oversee and enforce laws against insider trading to maintain fair and transparent financial markets. The intent behind prohibiting insider trading is to protect the integrity of the securities markets and to ensure that all investors have equal access to important financial information. Violators of insider trading laws can face severe penalties, including fines and imprisonment.
A recent insider transaction at Ares Commercial Real Estate Corporation has caught the attention of investors. The Chief Executive Officer, Bryan Donohoe, sold shares in the company worth US$195k at…