4 ms·
If you guessed that your employer may be in trouble and then sold stock, is that considered insider trading? Let's say, you are in charge of security. The CEO
by gene91 9y ago
If you guessed that your employer may be in trouble and then sold stock, is that considered insider trading?
Let's say, you are in charge of security. The CEO is never interested in your work. One day, you got an invitation to meet with the CEO. You sold all your stock before you go to the meeting (based on a guess that something bad might have happened). Is that illegal? Is the meeting invite considered material non public information?
- crispyporkbites 9y agoCan you prove whether you guessed or knew something only an insider would have known?
- tlrobinson 9y agoI'm not a lawyer, but I expect that would depend on if you were aware of non-public information that could affect that decision.
- lowdest 9y agoThe SEC has rules for what constitutes legal and illegal insider trading: https://www.sec.gov/fast-answers/answersinsiderhtm.html https://www.sec.gov/fast-answers/answersinsiderhtm.html Generally though, the rules don't disallow average employees from guessing about the future stock price. It becomes illegal insider trading if somehow you had obtained material non-public information to make the decision.
- sokoloff 9y agoThe mere fact of meeting invite, standing alone (no other information that you had, innocuous subject line, etc), would be non-public, but would probably not be found to be material. However, if you're the Equifax CSO and the CEO is never interested in your work, you might want to sell your shares as soon as they vest anyway.