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Old 11-26-2007, 11:44 PM
Phone Booth Phone Booth is offline
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Join Date: Aug 2006
Posts: 241
Default Re: Is This Insider Trading?

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What if "my" company was a proprietorship? What if this "insider" information is thoughts in your head? Say you own a large private corporation and you're the single largest customer of some publicly held supplier. For whatever reason, you decide that you will terminate that relationship. Is it insider trading to short that supplier's stock? What about in the reverse case where you buy ahead of the decision to give a contract to some company?

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If you have a significant relationship with an issuer that gives you access to material, non-public information you can be considered a "temporary insider" that has a duty not to trade on the information. This covers people like accountants, lawyers, and major suppliers.

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What about cases where you buy ahead of forming a relationship? And how can anyone actually prove that you traded on the insider information, if that information happens to be your own decision?
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