ChristianKl comments on Open thread, May 22 - May 28, 2017

[ChristianKl]

Insider training isn’t just about an obligation to the company in question. Investopedia:

Insider information is a non-public fact regarding the plans or condition of a publicly traded company that could provide a financial advantage when used to buy or sell shares of the company’s stock. Insider information is typically gained by someone who is working within or close to a listed company. If a person uses insider information to place trades, he or she can be found guilty of insider trading. Insider trading is illegal when the material information has not been made public and has been traded on. This is because the information gives those having this knowledge an unfair advantage.

[Oscar_Cunningham]

There doesn’t seems to be a consensus on this. Also Investopedia

A standard used by the Securities and Exchange Commission (SEC) to determine whether someone who receives and acts on insider information (a tippee) is guilty of insider trading. The Dirks Test looks for two criteria

1. Whether the individual breached the company’s trust

2. Whether the individual did so knowingly

Tippees can be found guilty of insider trading if they know or should know that the tipper has committed a breach of fiduciary duty.

See also Chiarella v. United States:

The Court held that “a duty to disclose under section 10(b) does not arise from the mere possession of nonpublic market information.” Chiarella had no “fiduciary relationship” with either company, nor was he an agent of either company, Chiarella had no duty to disclose the privileged information, and he did not receive confidential information from the targeted companies.

I think that maybe the situation is that the SEC wants insider trading to be illegal but the Supreme Court doesn’t.

[ChristianKl]

Okay, that seems like there’s more room for doing legal insider training.