I didn't say being an employee made you an insider. However, many (most?) companies nowadays impose blanket trading restrictions for the month before earnings

I didn't say being an employee made you an insider. However, many (most?) companies nowadays impose blanket trading restrictions for the month before earnings reports. I know Google does, and probably the other FAANGs as well. In my example, the brother-in-law would get caught and questioned, since the SEC actively watches for trades just before major moves in a stock. He could expect to be asked "why did you short Google?" I would not want to be in his shoes. And the employee could also expect to get asked why he called the BIL. Would the SEC go that far? They certainly could; whether they always do or not, it's "do you feel lucky?" Do you think we can't dig up examples where this has happened? In any case, the "blind trust" is the answer to conflicts of interest. Public officials have the ability to affect the fortunes of any private company by the performance of their duties, and that's why they're quite often required to use one.