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Most people fundamentally misunderstand material non public information (MNPI) and the laws around insider trading. Having a research desk that generates MNPI i
by qeternity 9y ago
Most people fundamentally misunderstand material non public information (MNPI) and the laws around insider trading. Having a research desk that generates MNPI is not illegal, nor is trading on this info. Say for instance that I discover a new killer Apple product buried deep in Apple code. It's not illegal for me to trade on this info, but it is illegal for Tim Cook to. Or let's say I use satellite imagery to determine McDonald's quarterly sales, the same applies.
- tptacek 9y agoNot only is it not illegal, but the whole idea of public trading markets depends on people doing it.
- Armisael16 9y agoWhat laws or regulations does it violate? It certainly isn't insider trading if you aren't an insider. EDIT: Oops, missed the double negative.
- tptacek 9y agoWe're saying the same thing. You missed the "not" in my sentence. :)
- qeternity 9y agoExactly. Thorough price discovery is how markets efficiently allocate capital. Traders and investors are compensated for their contributions to this process.
- rwallace 9y agoI read a story a while ago about a guy on an airline flight, looked out the window and happened to see smoke coming from a factory; on landing, he made a phone call from the airport to sell his shares in the company that owned the factory, and was subsequently convicted of insider trading. It sounds from what you're saying like this story should not be accurate?
- qeternity 9y agoUnless he set the fire, this story is absolutely false.