No, he wasn't wrong. You can trade on nonpublic information. From [1]: "The Supreme Court said in 1983 that people who trade on confidential information can

No, he wasn't wrong. You can trade on nonpublic information. From [1]: "The Supreme Court said in 1983 that people who trade on confidential information can be prosecuted only if the insider reaped a benefit from the leak." The convictions in this case were recently overturned: "With Nvidia, the disclosure began with an employee in the company’s finance unit who provided earnings numbers to a friend, who then passed the information to an analyst. The information made its way to Newman and Chiasson through the same circle of analysts involved in the Dell leak....Prosecutors said the information earned $4 million for Newman’s fund and $68 million for Chiasson’s." Of note: "In overturning the convictions, the appeals court said prosecutors needed to show that the person disclosing the information received a clear benefit -- something more than the nurturing of a friendship...The appeals court also said the person being prosecuted had to know about the benefit." In short, the only way to be convicted of insider trading is to directly pay off someone inside the company for the inside information. [1] http://www.bloomberg.com/news/articles/2015-10-05/insider-trading-cases-imperiled-as-top-u-s-court-spurns-appeal http://www.bloomberg.com/news/articles/2015-10-05/insider-tr...