Perry E. Metzger writes:
Timothy C. May writes:
And, how can someone who acts on overheard information--as in the elevator example Sandy cited--be charged with any crime? Unless they are "insiders," covered by SEC rules about trading, they are free to act on essentially anything they hear.
No, I'm afraid they aren't. Under the rules, if you have nonpublic information, even if you are not a corporate officer, you are an insider for purposes of "insider trading" and your trades are illegal.
(To elaborate on this: I was never classified as an "insider" during my time at Intel, and I certainly bought and sold the stock based on what products and news I knew was coming out or what rumors I'd heard. Only a select group of executives and staff in the specific departments generating earnings announcements, auditing, etc., were covered.
Only they were covered by the rules that require registration of all trades, you mean. You are completely confusing two uses of the word "insider".
IANAL, but I think you must be wrong about this, Perry. If this were the case then, as an employee of company XYZ, I would never be permitted to buy XYZ stock (which is clearly not the case) since I *always* have information that others outside the company do not (about staff changes, product plans and such). I suspect the deciding factor must have to do with the ability to execute actions which have substantial direct effects on the stock price (i.e. buying a company, declaring dividends, having a massive downsizing, etc.). -- Jeff