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I'd be concerned that taking any action with securities could be construed as insider trading (the SEC has been expanding the definition recently). On the idea
by iaw 10y ago
I'd be concerned that taking any action with securities could be construed as insider trading (the SEC has been expanding the definition recently).
On the idea of giving/selling the information to a competitor (possibly for some stock as well) seems like a reasonable course of action. The current bug reporting environment doesn't properly motivate some companies to fix their issues and reward the people that find them, maybe develop one that does.
If a company letting fatal security issues through became a competitive problem, we may stop seeing as many fatal security issues.
- eli 10y agoI don't understand. What would a competitor do with a flaw in someone else's product? Exploit it? Release it? Having a hard time imagining they would pay more than the company itself.
- iaw 10y agoPublicize on it. Imagine an ad where they demonstrate how flawed their competitors product is by showing you anyone can watch you on it?
- JumpCrisscross 10y ago> I'd be concerned that taking any action with securities could be construed as insider trading (the SEC has been expanding the definition recently). One, the courts have been narrowing - not expanding - the definition of insider trading [1]. Two, you are correct. Don't short a stock before tweeting a vulnerability. If you want to do this, retain a securities and investments lawyer. Vet your plan, trades and disclosure language carefully. [1] http://www.scotusblog.com/case-files/cases/salman-v-united-states/ http://www.scotusblog.com/case-files/cases/salman-v-united-s...
- sokoloff 10y agoConcur. Generating one's own non-public information and trading on it as a non-insider is not insider trading. This is no different than doing foot traffic counts (or satellite parking lot surveillance).
- Negitivefrags 10y agoLets say you run a large company, and you are about to make a big purchase from another public company. Lets say you are planning on increasing their sales by some non-trivial amount like 20%. Is it legal to purchase shares in that company before you make the purchase? You are leveraging private information, but not information gleaned from insider knowledge from the other company.
- dmurray 10y agoThis was given as the example of a trade we shouldn't do when I was first exposed to the insider trading policy at my current employer, a US trading firm. I think it might still be defensible and not insider trading by US standards, but it's at least a grey area.
- whamlastxmas 10y ago> it's at least a grey area. This is 90% of where money is made in my experience
- iaw 10y agoThis is similar to the scenario that cost David Sokol his job with Berkshire.
- marcoperaza 10y agoYou're both right. The SEC has been more aggressively prosecuting and trying to stretch the definitions, while the courts have been reigning them in somewhat in turn. Tread carefully. A lot could change if the court gets packed with progressives legislating from the bench in the next few years, as will likely happen.
- iaw 10y agoYou're completely right, let me rephrase to reinterpreting insider trading. I was specifically thinking of Bonan Huang and Nan Huang.
- evanpw 10y agoThis seems to be pretty textbook not insider trading (at least in the US). This is new, independent research about a company's products. At no point did you receive information from a company insider. You own your own information, so there's no insider trading. Incidentally, courts have recently been narrowing the definition of insider trading (see US vs. Newman).
- iaw 10y agoLet's say they've been changing the definition of insider trading. See: Bonan Huang and Nan Huang