4 ms·

The logic is not at all obvious. We are talking about large, publicly-traded corporations, and employees whose roles do not fall under section 16 guidelines.

The logic is not at all obvious. We are talking about large, publicly-traded corporations, and employees whose roles do not fall under section 16 guidelines. Their ability to influence the company's outcomes is somewhere between not material and nonexistent. Indeed, the law sees no reason to prohibit them from trading in their employers' securities. Why should they be prohibited from hedging their exposure? How are the shareholders harmed by this? It seems like an irrational response to a hypothetical fear, not sound logic. Especially since the only perfect hedge is found in a Japanese garden.

prostoalex 11y ago
> Their ability to influence the company's outcomes It's not the outcome, it's access to material information. Anyone who has access to sales or revenue information can come to reasonable conclusions in regards to underperforming/overperforming come earnings time, and trade on that information.
- fredkbloggs 11y ago
  If the information were material, then trading would be illegal. We're assuming these are people who can legally trade; i.e., those without access to material nonpublic information.
  - AdieuToLogic 11y ago
    And, as "prostoalex" stated in another reply: > ... the prosecution will assume you had some insider info to trade on. The onus is on you to prove that you didn't. If you want to tango with people that salivate at prosecuting people which profited from hedging while employed at the company which they hedged, I can only recommend against that course. It will end badly.
  - prostoalex 11y ago
    It's rare to work for a software company in software engineering capacity and not have access to such information. Even if you deliberately avoid it, business metrics get shared during all-hands of various levels, or displayed on giant screens. Formation of a new team that will work on a project X with a large partner Y is by itself material until it's public.

prostoalex 11y ago

> Their ability to influence the company's outcomes It's not the outcome, it's access to material information. Anyone who has access to sales or revenue information can come to reasonable conclusions in regards to underperforming/overperforming come earnings time, and trade on that information.

fredkbloggs 11y ago
If the information were material, then trading would be illegal. We're assuming these are people who can legally trade; i.e., those without access to material nonpublic information.
- AdieuToLogic 11y ago
  And, as "prostoalex" stated in another reply: > ... the prosecution will assume you had some insider info to trade on. The onus is on you to prove that you didn't. If you want to tango with people that salivate at prosecuting people which profited from hedging while employed at the company which they hedged, I can only recommend against that course. It will end badly.
- prostoalex 11y ago
  It's rare to work for a software company in software engineering capacity and not have access to such information. Even if you deliberately avoid it, business metrics get shared during all-hands of various levels, or displayed on giant screens. Formation of a new team that will work on a project X with a large partner Y is by itself material until it's public.