4 ms·

No, that is wrong. The qualification for insider trading is that it be a public company. Private companies don't fall under insider trading laws and public com

No, that is wrong. The qualification for insider trading is that it be a public company. Private companies don't fall under insider trading laws and public companies don't do 409a's.

7Figures2Commas 13y ago
Actually, you're wrong. There are a variety of "insider trading" laws and some apply to private companies too.[1] [1] http://www.lexology.com/library/detail.aspx?g=e24dc4ab-2a77-43d9-8a78-9ea46eca1aca http://www.lexology.com/library/detail.aspx?g=e24dc4ab-2a77-...
- chrishynes 13y ago
  That case refers to a company defrauding its own shareholders by withholding material information from them during a buyback. That's far different from what OP is suggesting -- a wink/nod to a third party indicating to buy or sell.
  - gamblor956 13y ago
    No, that's precisely what insider trading is--trading by any person based on inside information they have acquired through means covered by a fiduciary obligation (i.e. employment, service provider, etc.). A company can trade on inside information with its own shareholders, since the company is using information it has access to which its own shareholders may not.
    - chrishynes 13y ago
      Exactly. It's not "trading by any person". Insider trading is can only be done by someone with a fiduciary responsibility. If a non-involved person somehow acquires "inside" information (without getting it from one with a fiduciary responsibility) it's not insider trading even if the information is non-public.
gamblor956 13y ago
No, insider trading is not limited to public companies. Indeed, it's more of an issue with private companies precisely because the danger of unbalanced information is so high. You should read up on the insider trading case law--a good number of the cases involve companies which are not traded on a stock exchange. Assuming that the SEC regs only apply to public companies is a common misunderstanding. These regs actually apply to all companies which solicit investment, unless a specific exemption applies (i.e., solely intra-state, limited placement private offering, etc.)
- jamiequint 13y ago
  Thanks for the info! Any particularly interesting cases I should look at?

No, that is wrong. The qualification for insider trading is that it be a public company. Private companies don't fall under insider trading laws and public companies don't do 409a's.

7Figures2Commas 13y ago

Actually, you're wrong. There are a variety of "insider trading" laws and some apply to private companies too.[1] [1] http://www.lexology.com/library/detail.aspx?g=e24dc4ab-2a77-43d9-8a78-9ea46eca1aca http://www.lexology.com/library/detail.aspx?g=e24dc4ab-2a77-...

chrishynes 13y ago
That case refers to a company defrauding its own shareholders by withholding material information from them during a buyback. That's far different from what OP is suggesting -- a wink/nod to a third party indicating to buy or sell.
- gamblor956 13y ago
  No, that's precisely what insider trading is--trading by any person based on inside information they have acquired through means covered by a fiduciary obligation (i.e. employment, service provider, etc.). A company can trade on inside information with its own shareholders, since the company is using information it has access to which its own shareholders may not.
  - chrishynes 13y ago
    Exactly. It's not "trading by any person". Insider trading is can only be done by someone with a fiduciary responsibility. If a non-involved person somehow acquires "inside" information (without getting it from one with a fiduciary responsibility) it's not insider trading even if the information is non-public.

gamblor956 13y ago

No, insider trading is not limited to public companies. Indeed, it's more of an issue with private companies precisely because the danger of unbalanced information is so high. You should read up on the insider trading case law--a good number of the cases involve companies which are not traded on a stock exchange. Assuming that the SEC regs only apply to public companies is a common misunderstanding. These regs actually apply to all companies which solicit investment, unless a specific exemption applies (i.e., solely intra-state, limited placement private offering, etc.)

jamiequint 13y ago
Thanks for the info! Any particularly interesting cases I should look at?