Part 8/13:
Ross broadens the scope, noting that insider trading isn’t only a political problem. Corporate executives—CEOs, CFOs, and board members—also make trades based on privileged information. For example, during drug trial stages, when the company's leadership buys massive amounts of stock, it signals confidence in the drug’s success, which often results in substantial profits for savvy investors.
He cites the biotech company CADX, whose insiders began buying into a promising drug trial. After these purchases, the stock soared over 360% in four months—a textbook case of profit motivated by inside information.