Duncan Frissell writes:
Though if I trade based on my non public knowledge that the Gray Aliens will strike at Midnight on 31 December 1999, I am probably safe.
I'm not so sure. If you got access to advance information on Department of Commerce or Agriculture reports and traded futures based on them you'd be in sheep dip. I would suggest checking carefully before trading that way. On the other hand, it is not against U.S. law to trade non-US securities, do foreign exchange transactions, etc, based on non-public information.
If info that is too far removed is included then any stock analysis system would be illegal.
Heh heh heh heh heh. The laws are vague and are arbitrarily and capriciously applied. Technical violations happen constantly. One of the mechanisms of control the SEC has at its disposal is the fact that almost anyone in the business they choose to target can probably be thrown in jail for something or other.
Note BTW that the Feds lost almost all of the '80s insider trading cases that actually went to trial. They only won 2 or 3 that went through the full trial and appeals process. That is a very poor record since prosecutors usually have an 80-90% success rate in criminal trials.
If you are talking about the trials associated with the Boesky affair, most defendants plead guilty rather than face multiple lifetimes in jail. A few defendants were aquitted at trial. However, convictions for insider trading are not particularly rare. Perry