Reopening Insider Information Debate.

[Jason Strasser (strassa2)]

[ QUOTE ]
Most of you, including Jason Stausser are wrong. I'd make a small bet on it. Just using pure thought.

When I saw a long line at the newly installed Monopoly machines I immediately bought Williams. And I screwed the seller. Except that he should have realized that someone might have been doing that to him. It is a legitimate part of the game. And as unpalatable as it might sound, the same is true if I overhear two terrorists on their way to bomb the Bellagio (especially if I report them first). The possibility that something along those lines is going on should be part of your calculations. Unless you are DesertCat. It is ridiculous to have laws that expect people to refrain from stuff like that.

The only time the answer is unclear, I would think, is if the information is specifically related to undisclosed aspects of a business that is only privy to insiders. That is why I would think the executive who sells a competitor's stock short when he can't buy his own, is likely breaking the law. As far as someone overhearing executives and then trading on it, my take would be that he gets off but that the executives reimburse those who lost money due to their carelessness.

[/ QUOTE ]

holy cow david lol... this is almost as funny as the time you approached me in the Rio saying "hahah you are that idiot who insults me online" when you were with that black escort (for which it is fun to tease you for).

This is obviously NOT insider information. Anyone CAN go to a casino and see a line of people.... There is absolutely nothing illegal or insider about this. This is just called doing your homework.... Hearing a CEO whisper on the phone about great earnings then using that to make a trade, or hearing information about a terrorist attack and then shorting the building they are about to blow up is obviously insider trading.... This example is like saying "everyone loves this one biotech drug but I got my hands at it at the store over the counter and I am certain that this drug is a piece of [censored] so I sell it".... Also, just because you saw a long line of people doesnt mean that the stock is going to go up, but that is just an aside.

love you still,
Jason

[David Sklansky]

[ QUOTE ]
[ QUOTE ]
Most of you, including Jason Stausser are wrong. I'd make a small bet on it. Just using pure thought.

When I saw a long line at the newly installed Monopoly machines I immediately bought Williams. And I screwed the seller. Except that he should have realized that someone might have been doing that to him. It is a legitimate part of the game. And as unpalatable as it might sound, the same is true if I overhear two terrorists on their way to bomb the Bellagio (especially if I report them first). The possibility that something along those lines is going on should be part of your calculations. Unless you are DesertCat. It is ridiculous to have laws that expect people to refrain from stuff like that.

The only time the answer is unclear, I would think, is if the information is specifically related to undisclosed aspects of a business that is only privy to insiders. That is why I would think the executive who sells a competitor's stock short when he can't buy his own, is likely breaking the law. As far as someone overhearing executives and then trading on it, my take would be that he gets off but that the executives reimburse those who lost money due to their carelessness.

[/ QUOTE ]

holy cow david lol... this is almost as funny as the time you approached me in the Rio saying "hahah you are that idiot who insults me online" when you were with that black escort (for which it is fun to tease you for).

This is obviously NOT insider information. Anyone CAN go to a casino and see a line of people.... There is absolutely nothing illegal or insider about this. This is just called doing your homework.... Hearing a CEO whisper on the phone about great earnings then using that to make a trade, or hearing information about a terrorist attack and then shorting the building they are about to blow up is obviously insider trading.... This example is like saying "everyone loves this one biotech drug but I got my hands at it at the store over the counter and I am certain that this drug is a piece of [censored] so I sell it".... Also, just because you saw a long line of people doesnt mean that the stock is going to go up, but that is just an aside.

love you still,
Jason

[/ QUOTE ]

She's a nurse.

And I'm still sure you are wrong even if my analogy was poor. I overhear officers of the NAACP planning a boycott of some product because of a racist commercial and I short the stock. That's illegal? You might be right about information insiders are expected to keep secret, but you can't be about the terrorist example.

[Jason Strasser (strassa2)]

the terrorist example is vague enough where it might not be insider trading, but it is definitely unethical. whether it fits strictly under insider trading or not, i guess you might have a legal bone to pick, but there is no question that acting on this information is wrong. there is no rule that you are free from getting in trouble of insider information even if your inside information is bad... i'd say if you got a tip from a CEO but he turned out to actually be wrong (or lied to you), you'd definitely still be guilty of insider trading because your intent was to trade on information you knew was nonpublic.


hot nurse by the way david!

[bills217]

[ QUOTE ]
the terrorist example is vague enough where it might not be insider trading, but it is definitely unethical. whether it fits strictly under insider trading or not, i guess you might have a legal bone to pick, but there is no question that acting on this information is wrong.

[/ QUOTE ]

If we're not talking about legality, then why is acting on the information unethical? Who is harmed?

Frankly, I don't see any moral reason why insider trading should be illegal. It is simply in the best interest of everyone in the financial industry for the markets to be as transparent as possible (or at least create an image of transparency) to ensure investor confidence. But as far as morality goes, I can't think of any reason that insider trading is immoral. It's not fraudulent or aggressive in any way.

Maybe you can make an argument that insider trading is unethical (if not immoral) for someone who works in the financial industry, since they directly benefit from the image of transparency that the markets have created and their action might potentially harm that image. But I see no reason why Average Joe on the street in David's terrorist example is doing anything wrong by trying to profit from his knowledge, any more than I am doing something wrong when I bet against Kentucky's football team because a friend who's a manager tells me our best wide receiver has looked gimpy in practice.

[David Sklansky]

"i'd say if you got a tip from a CEO but he turned out to actually be wrong (or lied to you), you'd definitely still be guilty of insider trading because your intent was to trade on information you knew was nonpublic."

It would be illegal. But not because the information was "non public". It would be because the information "knowingly" was disclosed from the "inside".

Oh well. Obviously the market is just like poker was thirty years ago. I had to ask a few qustions at first to get the hang of things. Then I quickly realized that if I wanted more complex answers, I'd have to ask myself.