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Insider trade on Splunk acquisition?

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417 points mkmk | 6 comments | 21 Sep 23 15:58 UTC | HN request time: 0.651s | source | bottom
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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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kasey_junk ◴[21 Sep 23 18:23 UTC] No.37601767[source]▶
The SEC has recently been pursuing very expansive insider trading definitions, and they are occasionally losing, so it’s very hard to say.

But traditionally in the US insider trading is not about market fairness, it’s about not stealing from shareholders. So if you have no obligation to the company or it’s shareholders you aren’t an insider. The phrase is “breach of a fiduciary duty or other relationship of trust and confidence”.

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1. jahewson ◴[21 Sep 23 18:40 UTC] No.37602073[source]▶
This is not correct. If the tip came from an insider, it’s insider trading no matter who acts on it. See for example Martha Stewart who traded on an illegal tip from her stockbroker.
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2. kasey_junk ◴[21 Sep 23 18:54 UTC] No.37602265[source]▶
https://digitalcommons.liberty.edu/cgi/viewcontent.cgi?param...

most of the Stewart case was about her actions post the tip. If she’d had just said “my broker told me to sell” she’d likely be good to go (who knows). But she didn’t. She obscured and made it obvious with her actions that she was trying to steal from other shareholders (by acting on information she should not have).

3. mcguire ◴[21 Sep 23 18:57 UTC] No.37602310[source]▶
An intentional tip, right? Not an "overheard conversation".
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4. CrazyStat ◴[21 Sep 23 18:57 UTC] No.37602314[source]▶
Stewart was convicted and jailed for obstruction of justice and lying to investigators, not for insider trading.
5. jiveturkey ◴[21 Sep 23 19:14 UTC] No.37602618[source]▶
Has to be. If you are monitoring the travel activity of cisco and splunk execs and happen to see them go to a fancy dinner after weeks of office meetings, there is no way that is insider trading. That's the same thing as overhearing a phone call in a cab.
6. namdnay ◴[21 Sep 23 19:14 UTC] No.37602625[source]▶
To continue the “theft from shareholders” analogy, acting on a deliberate tip is fencing stolen goods