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Insider trade on Splunk acquisition?

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417 points mkmk | 5 comments | 21 Sep 23 15:58 UTC | HN request time: 0.822s | source
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kypro ◴[21 Sep 23 18:16 UTC] No.37601673[source]▶
I know this isn't what happened, but what if one day I'm waiting for the bus and I over hear a guy talking on their phone about an imminent acquisition?

1. Would that still fall under insider trading even if the information was accidentally heard, and even if I wasn't 100% sure of its accuracy?

2. If I had no clear connection to the company how would it be proven that I was trading on insider information? Surely it's not enough just to say the trade was statistically unlikely, or is it?

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bragr ◴[21 Sep 23 18:21 UTC] No.37601730[source]▶
It's still not public information (e.g. "Material Nonpublic Information"). You can't trade on it.

See 17 CFR § 240.10b5-1 "Trading “on the basis of” material nonpublic information in insider trading cases", particularly section (b) "Awareness of material nonpublic information."

https://www.law.cornell.edu/cfr/text/17/240.10b5-1

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1. mock-possum ◴[21 Sep 23 18:32 UTC] No.37601951[source]▶
A guy speaking out loud at a bus stop isn’t public information?
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2. bragr ◴[21 Sep 23 18:36 UTC] No.37602007[source]▶
The SEC has very specific rules and even specific form [1] they must file when companies release information like this.

[1] https://www.sec.gov/forms

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3. jahewson ◴[21 Sep 23 19:00 UTC] No.37602371[source]▶
So if the founder goes on TV and announces their merger then it’s nonpublic information until they file the form? Everyone who trades on that is insider trading? That can’t be right.
4. snowwrestler ◴[21 Sep 23 19:29 UTC] No.37602895[source]▶
Those rules regulate the company, not random people at a bus stop.
5. mock-possum ◴[22 Sep 23 15:59 UTC] No.37613715[source]▶
Right but - that means the company employee gets in trouble for making the information public (via announcing it in public at the bus stop) - not that I would get in trouble for hearing it and acting on it, right?