New Law Cracks Down on Insider Trading, Boosts Investor Protection.
Insider trading damages the stock market and undermines public trust. The Insider Trading and Securities Fraud Enforcement Act of 1988 strengthened penalties for insider trading, including higher fines and prison sentences. It also required companies to have policies to prevent insider trading and established rewards for reporting illegal activities. The Act affirmed Congress's support for enforcing laws against insider trading to protect investors and maintain market integrity.