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Home›Courses›Safety Training›Insider Trading: It's Not Worth the Risk

Insider Trading: It's Not Worth the Risk

16 minutesENSafety TrainingSecurities Exchange Act of 1934 Section 10(b); SEC Rule 10b-5
Quick Answer

Insider Trading: It's Not Worth the Risk is a 16-minute online course that trains employees on the legal prohibitions against insider trading under federal securities law, including the Securities Exchange Act of 1934 and SEC Rule 10b-5. It is designed for employees who may access non-public company information in the course of their work and includes a downloadable certificate of completion.

Course Overview

The Securities and Exchange Commission maintains insider trading as a top enforcement priority. In fiscal year 2024, the SEC obtained a record $8.2 billion in total financial remedies across all enforcement actions, and insider trading cases resulted in multi-million dollar penalties, disgorgement of profits, and officer-and-director bars. Criminal prosecution by the Department of Justice can result in fines of up to $5 million for individuals and $25 million for entities, plus imprisonment of up to 20 years. Even under the current administration's shift toward fewer overall enforcement actions, insider trading investigations have continued at a steady pace, with the SEC charging multiple cases in 2025 involving profits ranging from hundreds of thousands to over $17 million.

This course trains your employees on what constitutes insider trading, how to recognize material non-public information (MNPI), and why every employee has a fiduciary duty to protect confidential company information. Your team will learn the legal framework under the Securities Exchange Act of 1934 and SEC Rule 10b-5, the concept of tippee liability, and the practical steps employees should take to avoid even the appearance of improper trading activity.

What You'll Learn

  • Legal definition of insider trading under the Securities Exchange Act of 1934 and SEC Rule 10b-5
  • What constitutes material non-public information (MNPI) and how to identify it
  • The fiduciary duty every employee holds to protect confidential company information
  • Tippee liability and the legal consequences of sharing MNPI with family, friends, or associates
  • SEC and DOJ enforcement mechanisms, including civil penalties, disgorgement, and criminal prosecution
  • Practical steps for compliance, including trading blackout periods and pre-clearance procedures

Who Needs This Training

  • Employees at publicly traded companies who may access earnings data, merger plans, or other MNPI
  • Finance, accounting, and legal department staff who routinely handle sensitive financial information
  • Executives and senior leaders subject to Section 16 reporting and trading restrictions
  • Administrative assistants and support staff who may inadvertently encounter confidential information
  • IT personnel who manage systems containing material financial data
  • New hires at any company with insider trading policies as part of onboarding compliance training

Regulatory Background

Insider trading is prohibited under Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5, which make it unlawful to trade securities based on material non-public information or to tip such information to others who trade on it. The SEC has designated insider trading as one of its core enforcement priorities, and the agency continued to bring cases aggressively through 2025, including an international scheme generating over $17.5 million in illegal profits. Criminal penalties under the Securities Exchange Act can reach up to $5 million in fines and 20 years imprisonment for individuals, and up to $25 million for entities. Civil remedies include disgorgement of all profits, civil penalties of up to three times the profit gained or loss avoided, and officer-and-director bars. The SEC uses sophisticated data analytics and Consolidated Audit Trail (CAT) data to detect suspicious trading patterns, making detection and prosecution increasingly effective.

Frequently Asked Questions

Material non-public information (MNPI) is any information that has not been publicly disclosed and that a reasonable investor would consider important in making a trading decision. Examples include unannounced earnings results, pending mergers or acquisitions, major contract wins or losses, significant regulatory actions, executive changes, and material changes in financial condition. If the information could reasonably be expected to affect a company's stock price when made public, it is likely material.
Criminal penalties for insider trading under the Securities Exchange Act can reach up to $5 million in fines and 20 years of imprisonment for individuals. Entities face criminal fines of up to $25 million. In addition to criminal prosecution by the DOJ, the SEC can pursue civil enforcement seeking disgorgement of all profits, civil monetary penalties of up to three times the profit gained or loss avoided, and bars from serving as an officer or director of a public company.
Yes. Under tippee liability, an employee who shares material non-public information with another person who then trades on it can be held equally liable, even if the employee did not personally execute any trades. Both the tipper and the tippee face SEC enforcement action and potential criminal prosecution. The SEC has successfully prosecuted cases involving chains of tippees several levels removed from the original insider.
The SEC uses sophisticated surveillance tools, data analytics, and the Consolidated Audit Trail (CAT) to monitor trading patterns across U.S. equity markets. The agency identifies suspicious trading activity by analyzing patterns such as unusually large trades or options purchases made shortly before major corporate announcements. The SEC also receives referrals from stock exchanges, self-regulatory organizations, and whistleblowers through its Office of the Whistleblower, which offers financial rewards of 10% to 30% of sanctions exceeding $1 million.
This course provides foundational awareness training on insider trading laws and compliance obligations. While the SEC does not mandate a specific training format, publicly traded companies are expected to maintain insider trading policies and train employees who have access to material non-public information. Many companies use this type of awareness training as part of their broader compliance program, supplemented by company-specific policies on trading windows, pre-clearance requirements, and restricted lists.

Related Courses

Organizations building a corporate compliance program often pair this course with Anti-Trust Law Made Simple to cover both securities and competition law obligations, and with The Foreign Corrupt Practices Act Made Simple for employees who conduct business internationally.

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$24.95
per person
Volume Pricing
Team Size Price per Person
1 - 9$24.95
10 - 24$19.95
25 - 49$17.95
50 - 99$17.50
Subtotal $24.95

Certificate of completion included. Downloadable upon passing the final assessment.

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$24.95
per person