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Insider Trading"Insider work" is a term that most investors make up heard and usually harmonise with illegal conduct. But the term actually includes both legal and illegal conduct. The legal version is when corporate insidersofficers, directors, and employeesbuy and sell stock in their avow companies. When corporate insiders trade in their own securities, they must report their trades to the SEC. For more information about this type of insider trading and the reports insiders must file, please read "Forms 3, 4, 5" in our Fast Answers databank.Illegal insider trading refers generally to 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. Insider trading violations may also include "tipping" such information, securities trading by the person "tipped," and securities trading by those who misappropriate such information.Exa mples of insider trading cases that have been brought by the SEC are cases againstCorporate officers, directors, and employees who traded the confederations securities after learning of significant, surreptitious corporate developments Friends, business associates, family members, and other "tippees" of such officers, directors, and employees, who traded the securities after receiving such information Employees of law, banking, brokerage and printing firms who were given such information to provide services to the corporation whose securities they traded Government employees who learned of such information because of their employment by the government and Other persons who misappropriated, and took advantage of, confidential information from their employers. Because insider trading undermines investor confidence in the blondness and integrity of the securities markets, the SEC has treated the detection and prosecution of insider trading violations as one of its enforcemen t priorities.The SEC adopted new Rules 10b5-1 and 10b5-2 to resolve two insider trading issues where the courts have disagreed. Rule 10b5-1 provides that a person trades on the basis of material nonpublic information if a trader is "aware" of the material nonpublic information when fashioning the purchase or sale. The rule also sets forth several affirmative defenses or exceptions to liability. The rule