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Re: Saw this on CNN: Anonymous Stock tips over IRC as bad???
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
<[email protected]>):
> > 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