US regulations prohibit a firm’s employees from exploiting their private information about the firm for personal gain. Private information, however, often exhibits spillover effects and implications for a firm’s customers, suppliers, and competitors. We label the potential opportunities for employees at various levels of the firm (source firms) to profitably trade or disseminate private information about their business partners or competitors (target firms) as shadow trading. Our evidence indicates that target firms experience a 12% to 17% change in symptoms of informed trading activity prior to the release of private information by a business partner or competitor. Additional tests reveal that shadow trading symptoms arise more readily when source firms (1) have no explicit policy restricting shadow trading by their employees; (2) experience regulatory shocks to own firm insider trading; (3) encounter exogenous employee mobility shocks; (4) internally promote their CEOs; or (5) face the sudden death of the CEO and promote internally. Back-of-the-envelope calculations indicate that each typical shadow trading event represents trading profits of up to $678,000. In sum, the evidence suggests that source firm employees constitute a key source of information leakage regarding customers, suppliers, and competitors.