Is This Insider Trading?

[Jason Strasser (strassa2)]

[ QUOTE ]
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.

[/ QUOTE ]


you are using material nonpublic information to make bets on the market. are you dumb, this is all so cut and dry insider trading.... you understand that the idea behind insider trading is that you abuse the system and take advantage of NONPUBLIC information.

[stinkypete]

[ QUOTE ]

you are using material nonpublic information to make bets on the market. are you dumb, this is all so cut and dry insider trading.... you understand that the idea behind insider trading is that you abuse the system and take advantage of NONPUBLIC information.

[/ QUOTE ]

except 2 and 3 are not considered "material". 3 isn't even close.

[Jason Strasser (strassa2)]

[ QUOTE ]
[ QUOTE ]

you are using material nonpublic information to make bets on the market. are you dumb, this is all so cut and dry insider trading.... you understand that the idea behind insider trading is that you abuse the system and take advantage of NONPUBLIC information.

[/ QUOTE ]

except 2 and 3 are not considered "material". 3 isn't even close.

[/ QUOTE ]


you are crazy to think that you are allowed to overhear information about earnings from someone who knows inside information and act on it.... im not a legal guy but i know that these rules are ultimately driven by intent and 2 is a clear situation of intent to cheat and I am pretty sure hearing something verbal constitutes material nonpublic information....

situation 3 is a little weird but imo this is clearly also cheating.

[stinkypete]

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]

you are using material nonpublic information to make bets on the market. are you dumb, this is all so cut and dry insider trading.... you understand that the idea behind insider trading is that you abuse the system and take advantage of NONPUBLIC information.

[/ QUOTE ]

except 2 and 3 are not considered "material". 3 isn't even close.

[/ QUOTE ]


you are crazy to think that you are allowed to overhear information about earnings from someone who knows inside information and act on it.... im not a legal guy but i know that these rules are ultimately driven by intent and 2 is a clear situation of intent to cheat and I am pretty sure hearing something verbal constitutes material nonpublic information....

situation 3 is a little weird but imo this is clearly also cheating.

[/ QUOTE ]

having reread 2, it's a little unclear, but if all you know is that he's discussing earnings and he looks/acts upset (which is how i originally interpreted), that's perfectly fine. if you actually overhear something material, thats another story.

[David Sklansky]

[ QUOTE ]
[ QUOTE ]
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.

[/ QUOTE ]


you are using material nonpublic information to make bets on the market. are you dumb, this is all so cut and dry insider trading.... you understand that the idea behind insider trading is that you abuse the system and take advantage of NONPUBLIC information.

[/ QUOTE ]

So how come most of the people on this thread are saying 2 and 3 are almost certainly NOT insider trading? Since they have more knowledge of the subject than me, and since I am dumb for not realizing that all three cases are clearly insider trading, then the only possible answer to my question is, "they are imbeciles".

[Esection]

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.

[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).