Re: Saw this on CNN: Anonymous Stock tips over IRC as bad???

[Jeff Barber <jeffb@sware.com>]

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