Insider Trading can be one of the worst crimes committed on Wall Street…
If caught doing it, insiders can face years in prison. So why do new insiders continue trading based on privileged information time after time?
For the ridiculous amounts of money that can be made, of course.
And that’s exactly why we spy, track, and follow the right insiders…legally!
To put it plainly, illegal insider trading is committed when a company insider—officer, director, or 10% owner—“tips off” an investor of an impending situation that could affect the price of that company’s stock, and then that investor buys shares based on the privileged information in anticipation of profiting when the information goes public.
Of course, insider trading is also committed when the insider himself buys shares based on privileged information before it goes public, but the former example makes my point perfectly.
I want to share this with you because it demonstrates 2 things…
1. That insider trading really does lead to very profitable opportunities, and
2. Why I track the insiders so closely and bring the best situations to my readers.
According to the Atlanta Journal-Constitution, “Four metro Atlantans were indicted this week on charges they used insider information to profit from a corporate buyout announcement involving pharmaceutical maker Chattem Inc., the maker of products such as Icy Hot heat pads and Allegra allergy medicine.”
Here’s the kicker…
When the $1.9 billion takeover deal was announced on December 21, 2009—after the convicted insider traders had purchased shares—Chattem’s shares rose 33% in 1 day!
So because the men who were tipped off to the privileged information from a company insider, they were able to get in on the stock before it made a huge 1-day leap when the info went public.
These are the gains you could get through knowing which stocks the insiders are purchasing.
And that’s why I try to bring the most profitable insider situations to readers of my Penny Stock Insider newsletter, thanks to my little-known loophole that allows me to spy on the insiders!
