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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: 0.611s | 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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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. andylynch ◴[21 Sep 23 19:05 UTC] No.37602456[source]▶
Caveat that other jurisdictions do take a broader view (from memory, France is one that comes to mind where overhearing something confidential and trading on it is unlawful).
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2. kasey_junk ◴[21 Sep 23 19:18 UTC] No.37602703[source]▶
Yes! Very explicitly I mention the US because our insider trading laws are based on a different theory than European laws (for instance)
3. compsciphd ◴[21 Sep 23 19:19 UTC] No.37602720[source]▶
I believe the SEC went after capital one analysts who used information capital one has via credit card usages at stores to trade against companies not capital one. While one might say that the info that capital one had was proprietary (as they deffinitely use it for other things), its hard to view it ast hurting people one has a fiduciary duty to, but I believe they still won the conviction.
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4. kevinmchugh ◴[21 Sep 23 19:30 UTC] No.37602905[source]▶
Were the analysts acting independently or on behalf of capital one? Because on its face it's capital one's information to trade with (other laws not withstanding)
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5. compsciphd ◴[21 Sep 23 19:33 UTC] No.37602949{3}[source]▶
yes they were acting on behalf of capital one, I'm just saying why its just not fidicuary duty to shareholders of traded company.