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When do insider trader laws kick in? I seem to remember that acting on information you overheard is legal; is being told info directly from the insider (if the
by NegativeK 10y ago
When do insider trader laws kick in? I seem to remember that acting on information you overheard is legal; is being told info directly from the insider (if they don't benefit) also illegal?
- harryh 10y agoIn theory yes, the insider has to receive some sort of personal benefit for it to be illegal. In practice, however, the bar for "benefit" is very low. It's a bit of a legal grey area. https://www.bloomberg.com/view/articles/2016-01-19/justices-will-know-insider-trading-when-they-see-it https://www.bloomberg.com/view/articles/2016-01-19/justices-...
- rrauenza 10y agoLet's also recall that Congress is exempt: http://www.forbes.com/sites/kylesmith/2011/06/01/insider-trading-rules-that-dont-apply-to-congress/#689f82cef862 http://www.forbes.com/sites/kylesmith/2011/06/01/insider-tra...
- PeCaN 10y agoIn the clearest case, insider trading laws kick in when you bribe an insider for information. Acting on something you overhead, hiring a private investigator to see who's having lunch with who, etc, are all fair game; paying for an advantage in the market is not. It turns out to be way more complicated in practice though. It looks like the SEC just settles things on a case-by-case basis.