5 ms·
> As far as insider trader, I don't suspect a random person who stumbled upon such data lawfully could be found guilty of any crime for using it. That sounds l
by ramchip 13y ago
> As far as insider trader, I don't suspect a random person who stumbled upon such data lawfully could be found guilty of any crime for using it.
That sounds like terrible advice to me. See this for example: http://www.investopedia.com/articles/03/100803.asp http://www.investopedia.com/articles/03/100803.asp
> Oftentimes, people accused of the crime claim that they just overheard someone talking. Take for example a neighbor who overhears a conversation between a CEO and her husband regarding confidential corporate information. If the neighbor then goes ahead and makes a trade based on what was overheard, he or she would be violating the law even though the information was just "innocently" overheard: the neighbor becomes an insider with a fiduciary duty and obligation to confidentiality the moment he or she comes to possess the nonpublic material information. Since, however, the CEO and her husband did not try to profit from their insider knowledge, they are not necessarily liable of insider trading. In their carelessness, they may, however, be in breach of their confidentiality.
- cowsandmilk 13y agoPlease explain how anything in your link classifies this as insider trading. My interpretation is that finding information in a taxi means I am not a corporate insider, therefore I could not be guilty of insider trading. Note, I agree with the currently most upvoted comment that you should see a lawyer. If you wouldn't make enough money by trading on this information to make seeing a lawyer worth it, then it isn't worth taking the risk of making the trade.
- smalter 13y agothat's a poorly written article that, for one, lacks citations. i think the point they're making with the excerpted text is that your "claim" that you merely overheard a conversation is going to be tested and could very likely fail if you have a pre-existing relationship with the tipper.
- dmourati 13y agoI don't think you read that article closely enough, nor my comment for that matter. Consider this, how would the fact that you took a random ride in the same cab as the "tipper" ever be established? In other words, what would be the basis of the insider information allegation? How would they ever know?
- thyrsus 13y agoIf it were worth the trouble: cell phone location records, taxi credit card transaction records, or taxi dispatcher records.
- dmourati 13y agoLet's say OP discovered a sure-fire way to make money with his located documents and the info they contain. He puts together all the money he can, puts it all into play, and wins huge. What starts the SEC or anyone for that matter into looking at him as an insider? When they do start looking, what ties him to the the taxi at all?
- ramchip 13y agoThey wouldn't know, but it wouldn't be legal.
- CamperBob2 13y agothe neighbor becomes an insider with a fiduciary duty Wow, that's the stupidest thing I've read all day. Is all of investopedia this broken?
- chris_wot 13y agoNo, they are correct. If you trade based on non-public information, you are guilty of insider-trading.
- CamperBob2 13y agoHow do you reconcile this sweeping statement with SEC v. Switzer? Like holding a monopoly, "insider trading" is not automatically a crime. Some specific conditions have to be met.