Which practice involves trading stocks based on non-public information?

Insider trading is the practice of buying or selling stocks based on information that is not publicly available. This can include tips or information about a company's performance, such as earnings announcements, mergers, acquisitions, or other significant corporate developments that have not yet been disclosed to the general investing public.

Engaging in insider trading is illegal in many jurisdictions because it undermines investor confidence in the fairness and integrity of the securities markets. Regulators like the Securities and Exchange Commission (SEC) in the United States specifically target insider trading to ensure a level playing field for all investors. This practice violates the principle of transparency that is fundamental to the functioning of equitable markets.

The other options do not pertain specifically to the buying or selling of stocks based on non-public information. Breach of contract relates to failing to fulfill the terms of a legally binding agreement; conflict of interest describes situations where individuals may have competing interests or loyalties; and corporate governance refers to the mechanisms, processes, and relations by which corporations are controlled and directed. None of these practices involve the misuse of non-public information for stock trading.