nsider trading in an economic sense is trading by parties who are better informed than their trading partners and thus in that sense, insider trading includes all trades, whether or not in securities, where information is asymmetric. On the other hand, insider trading in a legal sense involves the focus on purchases or sales by certain insiders within a 6-month period or on trading on the basis of "material" information by a broader, more amorphous group of insiders or their tippees. Insider trading in an economic sense need not be illegal and the law never has attempted to prohibit all trading by knowledgeable insiders.
             However, insider trading should be criminalised when a conduct that in essence amounts to a form of embezzlement from a party entitled to maintain the confidentiality of that information. Insider trading by managers has been traditionally regarded as unfair and harmful to the public confidence in capital markets. The main argument behind this view is that it creates perverse incentive
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