You don’t work for that company so it only means you for the news the fastest.
Even if you worked for Boeing, it is public news as soon as it happened. You just happen to know it the fastest. Pure alpha
Is it insider trading if I bought Boeing puts while inside the wrecked airplane?
101–110 of 227 posts
Re: Is it insider trading if I bought Boeing puts while inside the wrecked airplane?
#102Earlier quoted context omitted.
Slightly clarified my comment via a parenthetical. "Non-public" in this context refers to information which would only be available to those with a fiduciary responsibility and/or a confidentiality obligation to the organization. I was trying to avoid the use of "insider," because people tend to assume that means employees or directors, but that is not the case. Outside organizations who have, as an example, signed a…
> "Non-public" in this context refers to information which would only be available to those with a fiduciary responsibility and/or a confidentiality obligation to the organization. Right, but information available to those with a confidentiality obligation can still be traded on if acquired legally. That's the crucial point. It's not enough for it to be non-public and material, you must also be in breach of a fiducia…
It's not required – to my knowledge – that specific person disclosing the information be in breach of a fiduciary duty, as one could easily overcome that by disclosing to someone who discloses it to someone else, who then trades on it.
The scenario you mentioned is generally understood to be permissible, but it's not exactly clear to me why. Perhaps that the information became "public" (whether intentional or not) when discussing it in a public forum such as a coffee shop?
Re: Is it insider trading if I bought Boeing puts while inside the wrecked airplane?
#103Earlier quoted context omitted.
You're muddying the waters here, the original poster is correct, but with a few scenarios for outsiders. For example, a company that printed the financial statements of companies, had no NDAs, was trading on the data, and was convicted of insider trading because they knew the data was company confidential information. Theft from the company is the central tenet, whether you are an insider, have a fiduciary responsibi…
> or an outsider who comes across data from inside the company Doesn't it matter how you came across that data? If you were at a coffee shop and happened to overhear a bunch of Boeing engineers talking about how they were replacing bolts with hot melt glue I thought you could you trade on that. If they explicitly told you that they were replacing the bolts with hot melt glue, then you wouldn't be able to.
Unless you shad signed an NDA that stated they would not disclose non-public info and then told you about the glue, in which case you could still trade on it.
Re: Is it insider trading if I bought Boeing puts while inside the wrecked airplane?
#104Earlier quoted context omitted.
Important clarification: you do not need to have confidentiality obligations with respect to the information or a fiduciary relationship, it need only be information that is material and non-public information that belongs to the company (i.e. only available to those with a fiduciary responsibility or confidentiality obligation to the company). If an insider with confidentiality obligations shares material non-public…
What if you infer it from a person that does have a privilege position. Here’s the scenario. During acquisitions, acquiring company sometimes use market research companies to reach out to former execs at the company as part of their diligence. Can you trade long if you just receive a bunch of requests from market research firms but never actually talk to the acquiring company?
If you infer it, rather than being told by the research company then it’s probably on the “not” end of the “insider trading” spectrum. The SEC could still charge you but it would be hard to prove how you inferred the information
Re: Is it insider trading if I bought Boeing puts while inside the wrecked airplane?
#105Hmm. So a rouge Meta employee could put a barometric pressure monitor in Messenger or WhatsApp (that people use even without paid in-flight wifi) to detect depressurization and automatically short the airline and aircraft manufacturer.
They wouldn't have to be rouge, they could be any colour really
Re: Is it insider trading if I bought Boeing puts while inside the wrecked airplane?
#106IANAL, but I don't see how. If you're just an ordinary person, you're trading based on an event you witnessed in the course of going about your life. No different I would think than if you witnessed a plane crash. You might be investigated though if the amounts were large enough. It gets much more complicated I would think if you were an air traffic controller or otherwise learned about it in a professional capacity.
>It gets much more complicated I would think if you were an air traffic controller or otherwise learned about it in a professional capacity. IANAL, but I am curious if ATC radio communications are considered public. My understanding is that it is legal to listen to ATC radio; if that's the case, is the plane crashing "public information" right after you relay the info over the radio?
> I am curious if ATC radio communications are considered public
It varies by justification. In the UK it is illegal to monitor communications not intended for you ( Wireless Communications Act 1949 ).
Re: Is it insider trading if I bought Boeing puts while inside the wrecked airplane?
#107No, it is not. If you do not have a fiduciary relationship with Boeing and you have no confidentiality obligations with respect to the information, you are not trading on inside information. If you're in the plane when the door blows up, you're just the first person with material public information. You're not trading on material non-public information. See, e.g. https://www.law.cornell.edu/wex/misappropriation_theor…
"If you do not have a fiduciary relationship with Boeing"
Ok so what if you are a Boeing executive or engineer on said flight?
Re: Is it insider trading if I bought Boeing puts while inside the wrecked airplane?
#108Earlier quoted context omitted.
Important clarification: you do not need to have confidentiality obligations with respect to the information or a fiduciary relationship, it need only be information that is material and non-public information that belongs to the company (i.e. only available to those with a fiduciary responsibility or confidentiality obligation to the company). If an insider with confidentiality obligations shares material non-public…
> it need only be information that is material and non-public. I think this is wrong as well. Suppose you are a independent technician repairing cars. Over time you notice, that, say BMW car quality used to be good but has gone to shit. That's not public information, but you would be allowed to short BMW stock in the hopes that, once public catches on, their share price will tank. In fact half the point of stock trad…
Seems to me the technician does have public information, he is not the only technician that has that data he might just be the only wise enough to notice the pattern
Re: Is it insider trading if I bought Boeing puts while inside the wrecked airplane?
#109I recall learning in law school that “if there is no tipper there can be no tippee”. In order for there to be a tipper, the person has to have an intent to provide a tip improperly. Imagine there’s a CEO talking in an obscure foreign language in his own backyard, to a colleague on the phone, he is not a tipper — even if someone who happens to speak that obscure language is walking by his fence at that moment. As a re…
>Imagine there’s a CEO talking in an obscure foreign language in his own backyard, to a colleague on the phone, he is not a tipper Is that actually true? I could believe it if he were speaking in a cryptographic code, but even an obscure language has more than one speaker so he shouldn't be revealing corporate secrets where he can be overheard even if he's speaking a foreign language.
Apparently there are a few languages with only 2 speakers left, so I guess in that case its true.
Re: Is it insider trading if I bought Boeing puts while inside the wrecked airplane?
#110Hmm. So a rouge Meta employee could put a barometric pressure monitor in Messenger or WhatsApp (that people use even without paid in-flight wifi) to detect depressurization and automatically short the airline and aircraft manufacturer.
Most phones got rid of the barometers.