We use cookies to improve security, personalize the user experience,
enhance our marketing activities (including cooperating with our marketing partners) and for other
business use.
Click "here" to read our Cookie Policy.
By clicking "Accept" you agree to the use of cookies. Read less
Tipper: A Comprehensive Guide to Legal Definitions and Responsibilities
Definition & Meaning
A tipper is someone who shares confidential information about a corporation that is not publicly available. This information is often material, meaning it could influence an investor's decision to buy or sell stock. A tipper is in violation of their duties if they disclose this information for personal gain. The key factor in determining a breach is whether the tipper benefits, directly or indirectly, from sharing the information. If there is no personal gain involved, the tipper is not considered to have breached their duty to shareholders.
Table of content
Legal Use & context
The term "tipper" is primarily used in securities law, particularly in cases involving insider trading. It applies to individuals who possess nonpublic, material information and disclose it to others, known as tippees, for personal benefit. Legal actions may arise in both civil and criminal contexts, where the integrity of financial markets is at stake. Users can manage related legal matters through forms and templates available from US Legal Forms, which are drafted by experienced attorneys.
Key legal elements
Real-world examples
Here are a couple of examples of abatement:
(hypothetical example) A corporate executive learns that their company is about to be acquired at a premium price. They share this information with a friend, who then buys stock in the company before the acquisition is publicly announced. The executive benefits from the increased stock price when the acquisition is finalized.
Comparison with related terms
Term
Definition
Tipper
Person who discloses nonpublic, material information for personal gain.
Tippee
Individual who receives the information from the tipper and may act on it.
Insider Trading
Buying or selling a stock based on nonpublic information, which can involve both tippers and tippees.
Common misunderstandings
What to do if this term applies to you
If you believe you have received insider information or are involved in a situation where you might be a tipper, it is crucial to seek legal advice. Handling such matters can be complex, and professional guidance is recommended. You can also explore US Legal Forms for templates that may help you navigate related legal issues.
Find the legal form that fits your case
Browse our library of 85,000+ state-specific legal templates.