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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: 0.213s | 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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hash872 ◴[21 Sep 23 18:32 UTC] No.37601954[source]▶
But I'm pretty sure I read a case of a guy who traded on a future acquisition and was convicted on insider trading charges. He surreptitiously overheard it from his fiance, who worked for the company. Doesn't this guy not owe a company he doesn't work for a fiduciary duty....?
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1. jabroni_salad ◴[21 Sep 23 19:29 UTC] No.37602897[source]▶
As a someone in scope of FINRA, yes actually. Your immediate nuclear family owes your company that duty and you have to grant your company's watchdog the ability to monitor your family member's investments for restricted trades.

See also: I am not allowed to use robinhood at all because their referral program can reward you with a restricted security. Nobody was grandfathered and every RH user at my firm was told to xfer out or find a new job. I also can't use any roboadvisor.

For us peons, independence is a serious matter. It's just the rich and powerful that get to flaunt it.