23 ms·

Not much of a scandal since they were only profiting off their own company's stock value by analyzing the financial reports. Could have surmised a similar tren

Not much of a scandal since they were only profiting off their own company's stock value by analyzing the financial reports. Could have surmised a similar trend by monitoring purchase and shipment orders versus staffing headcount, quarter to quarter, month to month, etc. What I'm getting at is that if they are trading on their own company stock, what's the big deal? Stock markets are volatile anyway.

deleted 7y ago
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xmprt 7y ago
I know it's hard to miss but if you look closely, insider trading has the word "insider" in it. Meaning people inside the company (typically those with the material nonpublic information you're talking about) are specifically not allowed to trade in their stocks using that information. I hope for your own sake you work at a private company.
harry8 7y ago
Not legal advice. IMNAL. The test for inside information is that it is "material, non-public information used to inform the trade decision." This is supposed to mean that the information is not available to normal market investors (nonpublic) and if it were published, eg via stock exchange announcement, it would move the market price more than "noise" (material) so you buy (inform a trade decision). e.g. we just closed a billion dollar deal with recurring revenue that nobody trading our securities knows about increasing our expected after tax profit by 300%. You work as a lawyer on that deal and buy short dated out of the money call options you're doing an illegal thing. Hiring is up by 5% this year, some of them were logistics experts. From this and other pieces of small knowledge none of which are by themselves marke moving you infer things are going well and buy. This is ok. The material information was inferred not provided. This is what good investors are supposed to do. You probably need to be pretty careful trading the stock of a company you work for. Definitely get legal advice.
- postingFourFast 7y ago
  > The test for inside information is that it is "material, non-public information used to inform the trade decision." Not for much longer. ITPA replaces that with the simpler, squishier and more vague "obtained wrongfully". Wrongfully is not defined. It passed the House; if the Senate votes it in it'll be law: https://fortune.com/2019/12/10/what-is-insider-trading-prohibition-act-republicans/ https://fortune.com/2019/12/10/what-is-insider-trading-prohi...
- MandieD 7y ago
  My employer sends out a notice about 35 days before quarterly results are expected to be out reminding us about Germany's Capital Markets Law, advising all of us against trading shares in our company within 30 days before the earnings are published just to make sure we don't get into trouble. I'm in Germany, so insider trading rules are different from the US.
OliverJones 7y ago
Not much of a scandal? With respect, I couldn't disagree more. Insider trading is STEALING from a company's shareholders and option/RSU holders. An insider trader's profit comes directly from the losses of other investors. Stealing from public-market shareholders undermines the very premise of YC / HN -- that it's possible to build businesses strong enough to delight stock-market investors. If any kind of company (like Sili Valley networking companies) gets a reputation for stealing from investors, it will be harder for us all to get funded. Stealing from option and RSU holders? That's stealing from the guy in the next cube. It looks to me like the SEC people did their jobs in this case.
- Tenoke 7y ago
  > Insider trading is STEALING from a company's shareholders and option/RSU holders. An insider trader's profit comes directly from the losses of other investors. The debate around Insider Trading in general is much more nuanced than 'it is STEALING', and is legal in some places. What he is doing is making the market price reflect reality better, like most trading. Is it stealing if the profit they would've gotten was based on the market having less accurate data?

deleted 7y ago

[deleted]

xmprt 7y ago

I know it's hard to miss but if you look closely, insider trading has the word "insider" in it. Meaning people inside the company (typically those with the material nonpublic information you're talking about) are specifically not allowed to trade in their stocks using that information. I hope for your own sake you work at a private company.

harry8 7y ago

Not legal advice. IMNAL. The test for inside information is that it is "material, non-public information used to inform the trade decision." This is supposed to mean that the information is not available to normal market investors (nonpublic) and if it were published, eg via stock exchange announcement, it would move the market price more than "noise" (material) so you buy (inform a trade decision). e.g. we just closed a billion dollar deal with recurring revenue that nobody trading our securities knows about increasing our expected after tax profit by 300%. You work as a lawyer on that deal and buy short dated out of the money call options you're doing an illegal thing. Hiring is up by 5% this year, some of them were logistics experts. From this and other pieces of small knowledge none of which are by themselves marke moving you infer things are going well and buy. This is ok. The material information was inferred not provided. This is what good investors are supposed to do. You probably need to be pretty careful trading the stock of a company you work for. Definitely get legal advice.

postingFourFast 7y ago
> The test for inside information is that it is "material, non-public information used to inform the trade decision." Not for much longer. ITPA replaces that with the simpler, squishier and more vague "obtained wrongfully". Wrongfully is not defined. It passed the House; if the Senate votes it in it'll be law: https://fortune.com/2019/12/10/what-is-insider-trading-prohibition-act-republicans/ https://fortune.com/2019/12/10/what-is-insider-trading-prohi...
MandieD 7y ago
My employer sends out a notice about 35 days before quarterly results are expected to be out reminding us about Germany's Capital Markets Law, advising all of us against trading shares in our company within 30 days before the earnings are published just to make sure we don't get into trouble. I'm in Germany, so insider trading rules are different from the US.

OliverJones 7y ago

Not much of a scandal? With respect, I couldn't disagree more. Insider trading is STEALING from a company's shareholders and option/RSU holders. An insider trader's profit comes directly from the losses of other investors. Stealing from public-market shareholders undermines the very premise of YC / HN -- that it's possible to build businesses strong enough to delight stock-market investors. If any kind of company (like Sili Valley networking companies) gets a reputation for stealing from investors, it will be harder for us all to get funded. Stealing from option and RSU holders? That's stealing from the guy in the next cube. It looks to me like the SEC people did their jobs in this case.

Tenoke 7y ago
> Insider trading is STEALING from a company's shareholders and option/RSU holders. An insider trader's profit comes directly from the losses of other investors. The debate around Insider Trading in general is much more nuanced than 'it is STEALING', and is legal in some places. What he is doing is making the market price reflect reality better, like most trading. Is it stealing if the profit they would've gotten was based on the market having less accurate data?