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What is "Insider Trading?"
"Insider trading" refers generally to buying or selling a security, in
breach of a fiduciary duty or other relationship of trust and
confidence, while in possession of material, nonpublic information about
the security. Insider trading violations may also include "tipping" such
information, securities trading by the person "tipped" and securities
trading by those who misappropriate such information. Examples of
insider trading cases that have been brought by the Commission are cases
against: corporate officers, directors, and employees who traded the
corporation's securities after learning of significant, confidential
corporate developments; friends, business associates, family members,
and other "tippees" of such officers, directors, and employees, who
traded the securities after receiving such information; employees of
law, banking, brokerage and printing firms who were given such
information in order to provide services to the corporation whose
securities they traded; government employees who learned of such
information because of their employment by the government; and other
persons who misappropriated, and took advantage of, confidential
information from their employers.
Because insider trading undermines investor confidence in the fairness
and integrity of the securities markets, the Commission has treated the
detection and prosecution of insider trading violations as one of its
enforcement priorities.
the above is right from the sec site.
the key words are MATERIAL NONPUBLIC INFORMATION
tv
tony varela wrote:
>
> there is also a distinction of non-insiders trading on inside
> information.
> however the rules are that trading with knowledge of materially
> affecting information which has not been dissimated is illegal.
>
> for example a executive might see softening in sales and been selling
> insider stock legally as long as he register it under rule144, however
> if the company will be issuing a major news announcement such as an
> earnings shortfall and he sells or discloses to other persons that
> a material news is coming then all parties are covered under the insider
> rules. in essence is illegal to run ahead of the order.
>
> i wouldn't bet any money against the sec on it-i'm sure they are looking
> at every trade that took place not just yesterday but a few days back
> also. Nasdaq and the NYSE also
> run "stockwatch" depts constantly looking for suspicious activities. I
> don't know what they do in chicago, but i would assume that they
> have their own watchdog unit.
>
> tv
>
> editorial@xxxxxxxxxxxxx wrote:
> >
> > Bill,
> >
> > That's a good question...
> >
> > I think that the key point to remember is that insiders (officers, directors,...) are not restricted in their trading. They simply must report their transactions. In fact, there's a whole school of market analysis, as you know, which focuses on making the same trades the insiders do...
> >
> > All the best,
> >
> > OM
> >
> > ---- you wrote:
> > > List:
> > >
> > > I'm curious what the laws are concerning insider trading and stock indexes.
> > > I was watching the NASDAQ futures tick for tick yesterday around 3:50PM
> > > Eastern and it was clear that some "big dog" was doing some heavy selling
> > > there and into the close. Given the INTC announcement after the close it
> > > makes me wonder: are INTC, and other insiders, restricted in any way from
> > > trading the NASDAQ futures? It seems the major components of the indices
> > > could use the futures as a surrogate for insider trading.
> > >
> > > No sour grapes here, I've been a bear, but I'm curious.
> > >
> > >
> > > Bill Wynne
> > >
> > > Bill@xxxxxxxxxxxxxxx
> > >
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