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What if you disclosed private information on twitter before trading. Would that still break the law? "Just heard jelly bean futures are going down. Going to

by ipaddr 3y ago

What if you disclosed private information on twitter before trading. Would that still break the law? "Just heard jelly bean futures are going down. Going to sell now"

gmane 3y ago
Yes, it would break the law because the law is written based on how you got the information, not based on if the information is disseminated. The law is that you can't use misappropriated government information.
jabroni_salad 3y ago
Yes, since you are using insider information. And before spitballing further, consider the 'good faith' rule. Are you acting on the insider information in good faith? If not, do not do that thing.
- cmcaleer 3y ago
  Let's make it a bit more interesting and say the Twitter account is a paid subscription for $1MM/mo. I was following his Twitter account and knew that he seemed to have a good instinct for when things were going down, but it can't be proven that I knew that the account was disclosing non-public government information. Should I be expected to know that was information improperly obtained, particularly because of the massive premium cost of the subscription implies that it's possible that something improper is going on?
  - bluGill 3y ago
    Maybe. If a "reasonable person" would figure it was insider information then you are in trouble.
bluGill 3y ago
How long before. There are often rules that you have to disclose such data a specific amount of time before you trade - often a week or two. There is an exception for trades you scheduled far enough in advance that they couldn't have been insiders (ie if you want to pay your kids' Harvard tuition you can schedule the trade months in advance - you won't have insider information anyway) If everybody expects you to disclose that information in twitter than you are okay. However if the information is supposed to be disclosed on a SEC form (8k, and 10q are the most likely) than putting it on twitter first could get you in trouble even if you don't trade at all since someone who watches the SEC filings will not see your twitter notice)

by ipaddr 3y ago

What if you disclosed private information on twitter before trading. Would that still break the law? "Just heard jelly bean futures are going down. Going to sell now"

gmane 3y ago

Yes, it would break the law because the law is written based on how you got the information, not based on if the information is disseminated. The law is that you can't use misappropriated government information.

jabroni_salad 3y ago

Yes, since you are using insider information. And before spitballing further, consider the 'good faith' rule. Are you acting on the insider information in good faith? If not, do not do that thing.

cmcaleer 3y ago
Let's make it a bit more interesting and say the Twitter account is a paid subscription for $1MM/mo. I was following his Twitter account and knew that he seemed to have a good instinct for when things were going down, but it can't be proven that I knew that the account was disclosing non-public government information. Should I be expected to know that was information improperly obtained, particularly because of the massive premium cost of the subscription implies that it's possible that something improper is going on?
- bluGill 3y ago
  Maybe. If a "reasonable person" would figure it was insider information then you are in trouble.

bluGill 3y ago

How long before. There are often rules that you have to disclose such data a specific amount of time before you trade - often a week or two. There is an exception for trades you scheduled far enough in advance that they couldn't have been insiders (ie if you want to pay your kids' Harvard tuition you can schedule the trade months in advance - you won't have insider information anyway) If everybody expects you to disclose that information in twitter than you are okay. However if the information is supposed to be disclosed on a SEC form (8k, and 10q are the most likely) than putting it on twitter first could get you in trouble even if you don't trade at all since someone who watches the SEC filings will not see your twitter notice)