A tippee is a person who receives material non-public information about a company from someone in a fiduciary relationship with that company. This term is often associated with insider trading, where the tippee acts on this confidential information to make trades in the stock market. The concept was first introduced by Louis Loss, a professor at Harvard Law School.
The term "tippee" is primarily used in the context of securities law, particularly in cases involving insider trading. It is relevant in both civil and criminal legal practices. Individuals who trade based on insider information can face severe penalties, including fines and imprisonment. Users can manage some aspects of insider trading cases using legal templates available through US Legal Forms, which are drafted by qualified attorneys.
Here are a couple of examples of abatement:
Example 1: An employee of a tech company shares confidential earnings information with a friend, who then buys shares of the company before the public announcement. This friend is considered a tippee.
Example 2: A lawyer learns about a merger while representing a client and informs a family member, who then trades on that information. The family member is the tippee in this scenario.
Key legal references include:
| Term | Definition |
|---|---|
| Tipper | A person who provides material non-public information to a tippee. |
| Insider Trading | The act of buying or selling a publicly-traded company's stock based on material non-public information. |
If you believe you are a tippee or have received insider information, it is crucial to refrain from trading on that information. Consider consulting a legal professional to understand your rights and obligations. Additionally, you can explore US Legal Forms for templates that may help you navigate any related legal issues.
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A tipper is the person who provides the insider information, while a tippee is the one who receives and acts on that information.