Let's say the CEO of a multinational public company goes to an interview and says "we have hard times coming". Then, the share price drops. Later, the fiscal assets and report of the company is revealed. This reveals that the company is doing great and share price again rises. During this period the CEO manages to buy a large portion of stock at the expense of the trust of shareholders. Is this legal?
Asked
Active
Viewed 64 times
0
-
If you mean in the US, sure, it's illegal. They have thought of that. – Fattie Nov 15 '20 at 15:45
-
This would be fraud, and could land the CEO in prison. – Ron Beyer Nov 15 '20 at 18:12
-
1You are probably better off asking this on the [law.se] site. – DJClayworth Nov 15 '20 at 18:46
-
Then migrate this, I would also be interested to know under which law will this procecution be done?What the CEO says he was really telling truth then? – savelifedeservingadev Nov 15 '20 at 19:08
-
It's not illegal to say it; it's illegal to make money from it. The CEO cannot trade shares wihile having insider knowledge. – Aganju Nov 16 '20 at 06:54
-
I do not know much about trading but can you tell what you meant by "CEO cannot trade while having insider knowledge" . What if he helps someone else through this process and then take some states from that person? – savelifedeservingadev Nov 16 '20 at 07:12
-
I was wondering how many such frauds take place. – savelifedeservingadev Nov 16 '20 at 07:12
-
Insider trading is illegal, most country have enough safeguards – Dheer Nov 16 '20 at 08:38