How is "insider trading" defined in a legal framework?

Insider trading is defined as the illegal buying or selling of securities based on non-public information about a company. This definition captures the essence of insider trading, which involves individuals with privileged access to material, non-public information leveraging that information to make financial transactions that are not available to the general public. This practice violates securities laws because it undermines investor confidence and the integrity of the markets.

The critical aspect of this definition is the notion of non-public information, which pertains to any information that has not been released to the general public and could influence an investor's decision-making process if it were publicly available. As a result, those who engage in insider trading can gain an unfair advantage, leading to legal and ethical violations.

In contrast, the other options describe various legitimate trading practices or actions that do not encapsulate the legal definition of insider trading. For instance, legal trading based on public announcements is permitted and does not involve the unethical manipulation of confidential information.