Perry E. Metzger writes:
Jeff Barber writes:
So perhaps Tim over-simplified by saying that there were no limits on what ordinary employees could do. OTOH, it seems that Perry also over-simplified by flatly stating that Tim's trades while an Intel employee were "illegal".
First of all, I never said that Tim's trades were illegal -- indeed, I never mentioned Tim except to say that following his advice didn't seem like a particularly safe course to take. Second of all, I can't comment on whether Tim's trades were within the letter of the law or not. Indeed, it would be difficult even if one knew all the circumstances since the definition of "material non-public information" is so hard to pin down.
In response to Tim's message wherein he described trading in Intel stock while an employee there, you wrote (in message <199606031523.LAA05288@jekyll.piermont.com>):
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.
Sorry if I misinterpreted this.
The point of all this was not that one shouldn't participate in the employee payroll stock purchase plan. The point was that a random person on the street who gets told a 'hot tip' is probably subject to the insider trading laws, never mind that he wasn't an employee or what is conventionally thought to be an "insider".
OK. The only point I want to make is that thousands of us do this to some extent every year and the risk apparently isn't terribly high. Each person who works for a large corporation has *some* "non-public information" which helps them decide whether to participate in the stock purchase plan next year. (Obviously if I think the company's going to tank, I won't buy any more shares.) I haven't seen anyone attempt to define "material" but I'll concede that it's vague enough to be dangerous to anyone whose trades are large enough to attract attention. -- Jeff