Insider Trading: A Systematic Review

ABSTRACT

Insider trading is the act of buying or selling securities by individuals who have access to non-public information. This practice is considered illegal and is a violation of securities laws in many countries, including the United States. The Securities and Exchange Commission (SEC) defines insider trading as "buying or selling a security, in breach of a fiduciary duty or other relationship of trust and confidence, while in possession of material, nonpublic information about the security" (SEC, n.d.). The impact of insider trading on financial markets and the effectiveness of legal and regulatory frameworks in preventing insider trading have been the subject of much research. In this systematic literature review, we will examine the existing literature on insider trading and summarize the key findings. Methodology To identify relevant articles, we conducted a comprehensive search of academic literature using databases such as Google Scholar, JSTOR, and EBSCOhost. We used a combination of keywords such as "insider trading," "illegal trading," "securities fraud," and "financial crimes" to identify relevant articles. We also searched the reference lists of identified articles to find additional sources. We included articles published between 2010 and 2023 that provided insights into insider trading. We analyzed the articles using a thematic approach, and we organized our findings according to key themes. Results Our search yielded 334 articles, and after applying inclusion and exclusion criteria, we selected 7 articles for analysis. The articles covered a range of topics related to insider trading, including the prevalence of insider trading, the impact of insider trading on financial markets, and the effectiveness of legal and regulatory frameworks in preventing insider trading.

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