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If this were a material advantage, it would probably be considered insider trading.
by muzz 8y ago
If this were a material advantage, it would probably be considered insider trading.
- alasdair_ 8y agoMaterial knowledge is one reason why the optimal RSU strategy is to set up a 10b5-1 (https://www.investopedia.com/terms/r/rule-10b5-1.asp https://www.investopedia.com/terms/r/rule-10b5-1.asp) election to sell everything as it vests, then to cancel the election right before it triggers if your material insider knowledge tells you that the next quarter is going to beat market expectations. Completely legal but obviously ethically dubious.
- TomVDB 8y agoI agree that it could be considered insider trading, but the SEC clearly does not, which is all that matters. It’s simply undeniable that employees know more than others. And it’s unrealistic to think that none of knowledge would ever be helpful to better predict the stock price.