Is This Insider Trading?

[stinkypete]

[ QUOTE ]
1) Yes
2) Yes
3) Yes

in every circumstance you are privy to information that is not public knowledge. when you act on this information you are committing insider trading.

[/ QUOTE ]

for those of you saying #3 is insider trading, what if you go play blackjack at the wynn with your gambling addict friend, who loses, and on your way out he says something like "[censored] man, i hate this place, i'm gonna blow this [censored] up". you short wynn when you get home. if this isn't insider trading, where do you draw the line?

[john kane]

im doing a insider trading training programme today. fwiw so far has confirmed 1) is definitely no becuase:

"inside information is not of the competitor's shares, thus the person is just acting on a hunch"

edit: not saying this is better than what has already been said, just doing this training reminded me of this thread.

[DesertCat]

[ QUOTE ]
im doing a insider trading training programme today.

[/ QUOTE ]

Your first mistake is that you are doing a "programme", instead of a "program". We may have lifted much of our legal system from yours, but yours is still far superior and commonsense definitions of insider trading in jolly old England aren't necessarily applicable to 'merica.

Is John Kane your real name? I always thought it would be a cool name for a superhero. "John Kane, easygoing stock broker by day, the Greenmail Raider by night, scourge of underperforming companies and greedy CEOs!"

[john kane]

oops with the programme. ah sorry i thought they'd be international rules rather than country specific.

my real name is not john kane but i may change it by deed poll to john kane. i got the kane bit from a book i read years ago and so when i decided on my first poker account i went for john kane (john as i felt it went well with kane).

[Shoe]

[ QUOTE ]
[ QUOTE ]
im doing a insider trading training programme today.

[/ QUOTE ]

Your first mistake is that you are doing a "programme", instead of a "program". We may have lifted much of our legal system from yours, but yours is still far superior and commonsense definitions of insider trading in jolly old England aren't necessarily applicable to 'merica.

Is John Kane your real name? I always thought it would be a cool name for a superhero. "John Kane, easygoing stock broker by day, the Greenmail Raider by night, scourge of underperforming companies and greedy CEOs!"

[/ QUOTE ]

I had a professer whose name was John Kane.

[Rotating Rabbit]

[ QUOTE ]
[ QUOTE ]
1) Yes
2) Yes
3) Yes

in every circumstance you are privy to information that is not public knowledge. when you act on this information you are committing insider trading.

[/ QUOTE ]

for those of you saying #3 is insider trading, what if you go play blackjack at the wynn with your gambling addict friend, who loses, and on your way out he says something like "[censored] man, i hate this place, i'm gonna blow this [censored] up". you short wynn when you get home. if this isn't insider trading, where do you draw the line?

[/ QUOTE ]

With the example you give, the line is drawn at the definition of MATERIAL. And in such cases the law nearly always refers to 'in the opinion of a reasonable person with expert knowledge in finance/relevant area'.

Its obvious to say, but it must be both NON PUBLIC and MATEIRAL.

In both David's #3 and that example the information is certainly non public. David's #3 says he overhears every day for a week, and CLEARLY believes the story since he notifies the FBI, which means that as a reasonable person he felt it was MATERIAL. In your example, no reasonable person could, given the information, believe a man having a bad day was actually going to blow up a huge casino, it is NOT material. So your example is clearly not inside trading.

The trick comes in defining what is material for a 'reasonable person'. But these two examples obviously fall either side of this hard-to-define line.

And as for the CFA 'always' including a more extreme wrong (but reasonable) option etc, this is true if by 'always' you mean 'occasionally' !