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Insider trade on Splunk acquisition?

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417 points mkmk | 1 comments | 21 Sep 23 15:58 UTC | HN request time: 0.259s | 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. Retric ◴[21 Sep 23 19:10 UTC] No.37602548[source]▶
It becomes public information when shared with the public, unintentionally or not. The specific kinds of relationships involved are a big deal. It’s fine to tell a waitress you closed a huge deal and she can even trade on it, but tell your wife and she can’t trade stocks on that information.

“insiders must be breaching a fiduciary duty owed to their corporation when they trade on or tip confidential corporate information. This stipulation almost always means that an insider cannot trade on such information and cannot tip others about it if the insider stands to gain by doing so. https://sloanreview.mit.edu/article/when-is-it-legal-to-trad...

In the case where an unrelated outsider overhears the information that’s public disclosure. And the information no longer needs to be treated by random people as non-public.