A tippee is an individual who receives confidential information about a company from someone who is obligated to keep it secret. Using this information for financial gain could result in consequences for the tippee.
A tippee is an individual who obtains material nonpublic information from someone who has a fiduciary relationship with the company to which the information pertains. For instance, John, an employee of a company, discloses information about an upcoming product to his friend Sarah before it is publicly announced. Sarah then purchases stock in the company based on this privileged information. In this scenario, Sarah is considered a tippee as she received material nonpublic information from John, who had a fiduciary relationship with the company. This example demonstrates how a tippee can gain access to information that is not available to the general public and utilise it to make investment decisions. However, such actions are illegal as they provide the tippee with an unfair advantage over other investors who lack access to the same information. To prevent this type of unfair advantage, the Securities and Exchange Commission (SEC) enforces laws against insider trading.
A tippee is a person who receives insider information about a company from someone who has a fiduciary duty to the company, such as an employee or corporate officer.
It is illegal to receive and trade on insider information as a tippee, as it constitutes insider trading and is a violation of securities laws.
Yes, a tippee can be held liable for insider trading if they knowingly trade on or disclose insider information that they received from a company insider.
Penalties for insider trading as a tippee can include fines, imprisonment, and disgorgement of any profits made from the illegal trades.
A tippee can avoid liability for insider trading by refraining from trading on or disclosing any insider information they receive, and by reporting the information to the appropriate authorities.
Yes, a tippee can still be held liable for insider trading even if they were unaware that the information they received was considered insider information.
If a tippee suspects they have received insider information, they should refrain from trading on the information and report it to the appropriate authorities, such as the Securities and Exchange Commission (SEC).
Yes, a tippee can still be held liable for insider trading even if they did not personally benefit from the information, as long as they traded on or disclosed the information to others.
Yes, a tippee can still be held liable for insider trading even if they did not know the information was obtained illegally, as long as they knowingly traded on or disclosed the information.
If a tippee is accused of insider trading, they should seek legal counsel immediately and cooperate with any investigations or legal proceedings.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 17th April 2024.
To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.
- Page URL:https://dlssolicitors.com/define/tippee/
- Modern Language Association (MLA):Tippee. dlssolicitors.com. DLS Solicitors. May 09 2024 https://dlssolicitors.com/define/tippee/.
- Chicago Manual of Style (CMS):Tippee. dlssolicitors.com. DLS Solicitors. https://dlssolicitors.com/define/tippee/ (accessed: May 09 2024).
- American Psychological Association (APA):Tippee. dlssolicitors.com. Retrieved May 09 2024, from dlssolicitors.com website: https://dlssolicitors.com/define/tippee/
Our team of professionals are based in Alderley Edge, Cheshire. We offer clear, specialist legal advice in all matters relating to Family Law, Wills, Trusts, Probate, Lasting Power of Attorney and Court of Protection.
All author posts