Re: Is This Insider Trading?
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1. Favorable clinical trials at my company haven't been announced yet. So I can't buy the stock. But I short a competitor's stock.
2. I'm at a pay phone and I overhear the president of IBM lamenting the surprisingly bad earnings for this quarter as he speaks to the chairman on the neigboring phone. I short IBM.
3. I hear two apparent terrorists in the neigboring booth at a restaurant talk about throwing a bomb into the Wynn casino every day for a week. I notify the FBI but I also short the stock.
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I read through the Insider Trading Wiki and feel I have good enough understanding to answer the questions.
1. I would say this is not illegal insider trading. You have no fiduciary relationship to the shareholders of your competitors stock and you are not in possession of any non-public information pertaining to your competitors stock.
2. Quote from Insider Trading wiki: Not all trading on information is illegal inside trading, however. For example, while dining at a restaurant, you hear the CEO of Company A at the next table telling the CFO that the company will be taken over, and then you buy the stock, you wouldn't be guilty of insider trading unless there was some closer connection between you, the company, or the company officers.
3. Agian, you have no fiduciary relationship to the shareholders of Wynn and therefore are able to trade legally.
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