Often the choice faced by the investor who has material non-public information is characterized as "disclose or abstain," meaning that the investor may either trade after disclosing or abstain from trading on the information.

A few people have asked me what constitutes disclosure.

I've not researched the latest cases, but the generally accepted "best description" can be found in SEC v. Texas Gulf Sulpher Co., 401 F.2d 833 (2d Cir.1968), cert. denied.

The reading of a news release, which promoted Coates into action, is merely the first step in the process of dissemination required for compliance with the regulatory objective of providing all investors with an equal opportuinity to make informed investment judgements. Assuming that the contents of the official release could have been instantaneously be acted upon, at the minimum Coates should have waited until the news could reasonably have been expcted to appear over the media of widest circulation, the Dow Jones broad tape, rather than hastening to insure an advantage to himself and his broker son-in-law.

It would seem to me that if I operated an open listserver, upon which financial information regularly appeared and which any trader (serious or otherwise) might subscribe, my information should be held in the same legal regard as DJ. If not, the SEC has in effect created a monopoly for Dow-Jones and its ilk and effectively impede or excluded other news sources (e.g., Internet feeds) as legit means for generating market awareness, and therefore revenue. I and many others occassionally trade on public information from narrower sources than DJ (e.g., market newsletters). Sometimes DJ and others pick up info from these sources and sometimes they don't (or not immediately). Does that mean those trading on this data published not yet picked up by DJ may be trading illegally? If so, this is totally unjust and wrongheaded. -- Steve