Late day trading involves buying or selling securities after the market closes but before crucial information becomes public. This information can range from upcoming earnings reports to product launches or regulatory decisions, all of which can significantly impact stock prices. Because investors with access to this non-public information have an unfair advantage, late day trading is considered a form of insider trading and is illegal, violating insider trading regulations.

Individuals working in finance, accounting, or legal departments may have access to information about upcoming announcements that could affect stock prices. If they witness colleagues or superiors engaging in late day trading based on this knowledge, they can become whistleblowers. By reporting late day trading, whistleblowers help to ensure a fair and level playing field in the market and assist regulatory bodies in catching and punishing those who engage in this illegal activity.