{"id":283591,"date":"2026-06-29T08:33:00","date_gmt":"2026-06-29T12:33:00","guid":{"rendered":"https:\/\/news-you-need.com\/index.php\/2026\/06\/29\/some-kinds-of-insider-trading-are-perfectly-legal-and-they-offer-useful-signals-about-a-companys-health\/"},"modified":"2026-06-29T09:00:09","modified_gmt":"2026-06-29T13:00:09","slug":"some-kinds-of-insider-trading-are-perfectly-legal-and-they-offer-useful-signals-about-a-companys-health","status":"publish","type":"post","link":"https:\/\/news-you-need.com\/index.php\/2026\/06\/29\/some-kinds-of-insider-trading-are-perfectly-legal-and-they-offer-useful-signals-about-a-companys-health\/","title":{"rendered":"Some kinds of insider trading are perfectly legal \u2013 and they offer useful signals about a company\u2019s health"},"content":{"rendered":"

Some kinds of insider trading are perfectly legal \u2013 and they offer useful signals about a company\u2019s health<\/a><\/p>\n

https:\/\/theconversation.com\/some-kinds-of-insider-trading-are-perfectly-legal-and-they-offer-useful-signals-about-a-companys-health-285470<\/a><\/p>\n

Publish Date: 2026-06-29 08:33:00<\/a><\/p>\n

Source Domain: theconversation.com<\/a><\/p>\n

It\u2019s a mantra among business executives that slashing their workforce will streamline operations and increase productivity \u2013 a strategic boost to the bottom line. And recent downsizing announcements have been no different, especially at tech companies citing massive disruptions caused by artificial intelligence. <\/p>\n

Meta CEO Mark Zuckerberg, for example, stated in May 2026 that \u201cthis is the most dynamic I have seen our industry\u201d as the company was starting its announced cull of 8,000 workers. He added: \u201cI\u2019m optimistic about everything we\u2019re building. But success is not a given.\u201d <\/p>\n

For affected workers, of course, downsizing is brutal. And growing fears over diminishing job security in white-collar fields once thought of as safe are a key driver behind Americans\u2019 growing pessimism about the economy.<\/p>\n

But for two other groups \u2013 the workers still employed at downsizing companies, as well as investors \u2013 there\u2019s a source of clarity amid the chaos. To see whether job cuts will actually help turn a business around, they can find a valuable signal in the buying and selling of the company\u2019s stock by its own employees, especially in its senior ranks.<\/p>\n

This type of insider trading, which is perfectly legal, was the focus of our research as finance professors. We found that it\u2019s possible to predict the outcomes of corporate downsizing by looking at whether these insiders show their confidence, or lack thereof, in turnaround plans by selling or buying company stock.<\/p>\n

This knowledge is also easier and quicker to come by than it used to be. Following the 2002 enactment of a sweeping accounting reform law, the Sarbanes-Oxley Act, these trades have to be disclosed within two days. <\/p>\n

A different type of insider trading<\/h2>\n

Media attention typically focuses on illegal insider trading, which happens when someone makes money off information that the public doesn\u2019t have. Lifestyle icon Martha Stewart and Enron CEO Jeffrey Skilling are just two of the…<\/p>\n

Source<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Some kinds of insider trading are perfectly legal \u2013 and they offer useful signals about…<\/p>\n","protected":false},"author":1,"featured_media":283592,"comment_status":"closed","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.theconversation.com\/files\/744563\/original\/file-20260626-64-o79ox8.jpg?ixlib=rb-4.1.0&rect=0%2C256%2C3073%2C1536&q=45&auto=format&w=1356&h=668&fit=crop","fifu_image_alt":"","footnotes":""},"categories":[14],"tags":[20],"class_list":["post-283591","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-artificial-intelligence","tag-artificial-intelligence"],"_links":{"self":[{"href":"https:\/\/news-you-need.com\/index.php\/wp-json\/wp\/v2\/posts\/283591"}],"collection":[{"href":"https:\/\/news-you-need.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/news-you-need.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/news-you-need.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/news-you-need.com\/index.php\/wp-json\/wp\/v2\/comments?post=283591"}],"version-history":[{"count":1,"href":"https:\/\/news-you-need.com\/index.php\/wp-json\/wp\/v2\/posts\/283591\/revisions"}],"predecessor-version":[{"id":283593,"href":"https:\/\/news-you-need.com\/index.php\/wp-json\/wp\/v2\/posts\/283591\/revisions\/283593"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/news-you-need.com\/index.php\/wp-json\/wp\/v2\/media\/283592"}],"wp:attachment":[{"href":"https:\/\/news-you-need.com\/index.php\/wp-json\/wp\/v2\/media?parent=283591"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/news-you-need.com\/index.php\/wp-json\/wp\/v2\/categories?post=283591"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/news-you-need.com\/index.php\/wp-json\/wp\/v2\/tags?post=283591"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}