Insider trade on Splunk acquisition?

Where's the line for insider trading on something like this? Say you were a low level Splunk or Cisco employee and you had a hunch the acquisition was going to close sometime this week (you're not working on the deal, you just heard through the grapevine that it's happening). Is that considered insider trading?

>Is that considered insider trading?

Yes.

Legally speaking then, it's best to never make trades on any company that you currently or have previously (because you could still have friends that work there) worked for?

Have you never worked for a publicly traded company where part of your compensation is in RSUs?

You are only able to trade share's during specific windows of time typically 1 week after earnings are released.

Additionally virtually every company I've known has explicit policies stating that you cannot buy/sell any derivatives related to the company stock (which is a shame since buying put options is a legitimate way to insure your compensation).

Further more, even these rules are only this lax for non-executive or other high level employees. If you're higher up in the company you have much more access to non-public material information. The solution to this is usually to set up a 10b5-1 that automatically liquidates shares based on a schedule approved by the board.

In regards to the "previously" question. I wouldn't worry about legitimate trades, but if you are trading based on insider information and looking to gain a lot of money, then trading would, by definition, be "insider trading"