What is being done to prevent insider trading?
The industry has made headway in ensuring equal treatment for all investors. For example, it was often said that investors who owned non-voting shares were disadvantaged, not just through restricted voting rights but also if the company was being taken over. Common shares with restricted voting rights still exist, although they are unpopular and must be clearly identified as non-voting shares. Most companies now provide a coat-tail provision that gives non-voting shareholders a chance to take part in any special deals that are offered for the shares in a takeover.
Insider trading is carefully regulated. Insiders are those who have special access to information about a company that is not generally known and would affect the price of its securities. Anyone who is defined as an insider by the securities commissions has to report any trading in the security. It is illegal for advisors, investors, and anyone party to inside information to act on it.