Generally speaking, "Insider trading", which has already heard by most investors, is usually closely associated with illegal conduct and has aroused public interest and attention. It claims the security of both buying and selling. This is made by someone who has access to material, nonpublic information linked with the security. (Gerald N. Hill and Kathleen T. Hill. 2005) In other words, it mainly collect the confidential information of a business, it is often achieved by employment in a company or a stock brokerage. Moreover, it is often considered to be a crime under the Securities, Exchange Act, Ivan Boesky and some others which have already been sent into prison and also a small fine was paid chiefly because that it takes the impacts of accumulated wealth into consideration completely. To be more exact, it is commonly believed that the term can be classified into legal and illegal conduct. (U.S. Securities and Exchange Commission. 2013) Moreover, new rules called 10b5-1 and 10b5-2 have been adopted by the SEC. The main purpose of this action is to solve two insider trading issues immediately that the courts are disagreed with.

Exactly speaking, rule 10b5-1 has long been considered to believe the fact that when conduct the purchase or sale, it is true that people often trade in relying on the nonpublic material information once a trader really has got a good understanding of the material nonpublic information. The rule also puts out some effective defenses and exceptions toward the liability. This has really given individuals permission so as to better trade in the appointed situation. Rule 10b5-2, however, chiefly demonstrates how does the misappropriation theory is applied to the relationships of business. It holds the opinion that people are likely to receive confidential information from different situations which would give them a feeling of confidence. Therefore, it is often considered to be quite liable when taking the misappropriation theory into consideration. It is obvious that the rules which are associated with insider trading are really very complex and will differ greatly from one country to another. As to the definition of insider, it covers insiders themselves as well as any person who is related to it. Exactly speaking, whoever has a good knowledge of non-public information has a great possibility to feel guilty.

Honestly, once insider trading gets emergence, it can be justified without any exaggeration that people’s opinions differ from one to another. In this part, the arguments will be discussed thoroughly chiefly by using the critical thinking. That is to say it will be considered in two ways. (Nate Raymond. 2014) An increasing number of economists and legal scholars claim that laws are likely to make insider trading illegal and it should be cancelled immediately. They firmly believe that insider trading is often depending on nonpublic material information which can make all the investors benefit a lot. In contrast, it ought to introduce new information into the market quickly. Besides, they demonstrate that insider trading is belonging to a kind of victimless act. They hold the opinion that both willing buyers and sellers ought to be treated property, also there is no contract has priority among the parties. That is to say, it does not likely to refrain from trading. The Atlanticﾧhas often accustomed to describe this process as "modern finance has to be a victimless crime". It is commonly believed that the legal version refers to the fact that corporate insiders buy or sell stock to others who are willing to buy in the companies where they worked. Specifically, the insiders of the corporate are mainly officers, directors, and employees. Also it is said that the detection violations of insider trading have been treated by the SEC as an indispensable part of its enforcement priority. Other critics, however, argue that it does a great harm to the society. The reason why they say this is largely