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417 points mkmk | 1 comments | | HN request time: 0.215s | source
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ryanSrich ◴[] No.37601280[source]
Where's the line for insider trading on something like this? Say you were a low level Splunk or Cisco employee and you had a hunch the acquisition was going to close sometime this week (you're not working on the deal, you just heard through the grapevine that it's happening). Is that considered insider trading?
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meindnoch ◴[] No.37601309[source]
>Is that considered insider trading?

Yes.

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ryanSrich ◴[] No.37601371[source]
Legally speaking then, it's best to never make trades on any company that you currently or have previously (because you could still have friends that work there) worked for?
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1. WJW ◴[] No.37601605[source]
If you are in the USA, rule 10b5-1 of the SEC [1] "allows insiders of publicly-traded corporations to set up a trading plan for selling stocks they own". Despite the description in the link, as I understand it you can also buy more stock as long as you announce it well in advance. It is explicitly meant to allow people who cannot avoid having non-public information about a stock to still trade in that stock. By forcing them to publicly announce well in advance what they intend to trade and when, the idea is that they then cannot do the short term high risk trading that you need to really profit from insider trading.

https://www.investopedia.com/terms/r/rule-10b5-1.asp