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

["Perry E. Metzger" <perry@piermont.com>]

Timothy C. May writes:
> Namely, are the people "talking up" a stock committing a crime?

Possibly.

> 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.

Don't go to Tim for advice on steering clear of the SEC's enforcement
people.

> (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".

> But ordinary people, even employees of a company, are not
> considered to be "insiders" and hence are not covered by insider trading
> laws.)

Follow Tim's advice and wind up in jail. I can give people specific
cases if they like.

Securities laws are extremely complex, extraordinarily broad, and
subject to extremely flexible interpretation. I would suggest not
attempting to skate a fine line near them -- the ice is very thin.

Perry