Insider trading involves buying or selling a company's securities based on material, nonpublic information. It's illegal when it breaches a fiduciary duty or trust.

Not all insider trading is illegal. Legal insider trading occurs when corporate insiders trade their company's stock and report it to regulators.

Notable insider trading cases include Martha Stewart's 2001 ImClone sale and Raj Rajaratnam's Galleon Group scandal.

In the U.S., the SEC enforces insider trading laws under the Securities Exchange Act of 1934. In India, SEBI governs under the Prohibition of Insider Trading Regulations, 2015.

Regulators detect insider trading through monitoring trading patterns, whistleblower tips, and advanced analytics.

Penalties for illegal insider trading include hefty fines, imprisonment, and reputational damage.

Companies implement compliance programs, trading windows, and employee training to prevent insider trading.