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Legal question: Insider trading claims might be difficult since you can claim the vulnerabilities were public knowledge waiting to be discovered, but... Can y

Legal question: Insider trading claims might be difficult since you can claim the vulnerabilities were public knowledge waiting to be discovered, but... Can you trade on knowing the security disclosure timeline prior to your publication of the vulnerability? That would seem to be insider knowledge until AMD authorizes publication. E.g. I've got knowledge that AMD likely wouldn't be able to fix the flaws prior to my disclosure. That knowledge would inherently be non-public. Thoughts? Disclosure: I've been long AMD for a while.

Sephr 9y ago
> until AMD authorizes publication AMD doesn't have the power to prevent publication of research from third party researchers that haven't entered in an agreement with them. This definitely isn't insider trading.
- eganist 9y ago
  > AMD doesn't have the power to prevent publication of research from third party researchers that haven't entered in an agreement with them. This definitely isn't insider trading. Correct, though this assumes AMD has yet to reply. If AMD did reply after the initial disclosure and before any trades were made, then the order of events which may warrant such a look would be: - Private Disclosure made. - AMD replies privately with anything substantive. This could include a timeline, or even an indication that a fix may take a while. - Trades made. - Public disclosure made. Should events follow this sequence, trades made would have been informed by private knowledge from AMD that had yet to be released. I'm not saying this is how it played out, but if it did, I'd suspect some amount of legal exposure.
  - Sephr 9y ago
    > AMD replies privately Their replies are only private if the discloser keeps them private. The discloser is free to publish their correspondences with AMD which may include a timeline. Regardless, this entire publication can happen without once talking to AMD. There is no need to notify or correspond with AMD in order to publish the security research and short AMD's stock.
    - eganist 9y ago
      > Their replies are only private if the discloser keeps them private. The discloser is free to publish their correspondences with AMD which may include a timeline. Sure, but if trades are made and correspondences are subsequently released, those trades were made with insider information is my point.
  - deleted 9y ago
    [deleted]
puzzlingcaptcha 9y ago
Insider trading usually implies coming into possession of confidential information and acting on it. Trading on non-public information that results from your own research and then announcing it is not illegal. Imagine someone buying stock and then saying the company is good. Not very controversial is it. Warren Buffet does it. Shorting stock and saying the company is bad is just the flip side of it. In fact, there are equity research companies that do specifically that (e.g. Muddy Waters). Whether that research holds water or not is for the market to determine (AMD is up on the day).
- eganist 9y ago
  > Trading on non-public information that results from your own research and then announcing it is not illegal. Correct. I'm not referring to this. I'm referring to trading on information discerned from communications with e.g. AMD but prior to disclosure of the vulnerability, especially if those communications which establish e.g. timelines are only disclosed after trading Hence my point about trading upon understanding AMD's response timeline e.g. from emailing them.
  - Rylinks 9y ago
    Generally speaking, a company communicating information to you does not bar you from trading unless you explicitly agree to refrain from making trades.
    - eganist 9y ago
      This is fair. Thanks.

Sephr 9y ago

> until AMD authorizes publication AMD doesn't have the power to prevent publication of research from third party researchers that haven't entered in an agreement with them. This definitely isn't insider trading.

eganist 9y ago
> AMD doesn't have the power to prevent publication of research from third party researchers that haven't entered in an agreement with them. This definitely isn't insider trading. Correct, though this assumes AMD has yet to reply. If AMD did reply after the initial disclosure and before any trades were made, then the order of events which may warrant such a look would be: - Private Disclosure made. - AMD replies privately with anything substantive. This could include a timeline, or even an indication that a fix may take a while. - Trades made. - Public disclosure made. Should events follow this sequence, trades made would have been informed by private knowledge from AMD that had yet to be released. I'm not saying this is how it played out, but if it did, I'd suspect some amount of legal exposure.
- Sephr 9y ago
  > AMD replies privately Their replies are only private if the discloser keeps them private. The discloser is free to publish their correspondences with AMD which may include a timeline. Regardless, this entire publication can happen without once talking to AMD. There is no need to notify or correspond with AMD in order to publish the security research and short AMD's stock.
  - eganist 9y ago
    > Their replies are only private if the discloser keeps them private. The discloser is free to publish their correspondences with AMD which may include a timeline. Sure, but if trades are made and correspondences are subsequently released, those trades were made with insider information is my point.
- deleted 9y ago
  [deleted]

puzzlingcaptcha 9y ago

Insider trading usually implies coming into possession of confidential information and acting on it. Trading on non-public information that results from your own research and then announcing it is not illegal. Imagine someone buying stock and then saying the company is good. Not very controversial is it. Warren Buffet does it. Shorting stock and saying the company is bad is just the flip side of it. In fact, there are equity research companies that do specifically that (e.g. Muddy Waters). Whether that research holds water or not is for the market to determine (AMD is up on the day).

eganist 9y ago
> Trading on non-public information that results from your own research and then announcing it is not illegal. Correct. I'm not referring to this. I'm referring to trading on information discerned from communications with e.g. AMD but prior to disclosure of the vulnerability, especially if those communications which establish e.g. timelines are only disclosed after trading Hence my point about trading upon understanding AMD's response timeline e.g. from emailing them.
- Rylinks 9y ago
  Generally speaking, a company communicating information to you does not bar you from trading unless you explicitly agree to refrain from making trades.
  - eganist 9y ago
    This is fair. Thanks.