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Is it insider trading if I bought Boeing puts while inside the wrecked airplane?

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Re: Is it insider trading if I bought Boeing puts while inside the wrecked airplane?

#181

Post by bhk »

injb wrote: post #44
jasode wrote: post #34

Earlier quoted context omitted.

>I think this is wrong as well. The gp's wording is a little confusing but he's just trying to explain the transitive logic of non-public information transferring from a "true insider" to an outsider is also "insider trading" and thus illegal. Think of it as the provenance of information coming from an insider. E.g. Martha Stewart is an "outsider" and not an insider of drug company ImClone but she was found guilty of…

>> Martha Stewart is an "outsider" and not an insider of drug company ImClone but she was found guilty of insider trading Minor correction: she was not convicted of insider trading. That charge was dismissed. She was only convicted of lying to investigators.

I can't find any evidence that she was ever charged with insider trading.

The judge dismissed a charge of "securities fraud", which claimed that she had defrauded investors in her own company by making false statements to the public.

The jury convicted her of "false statements", obstruction, and conspiracy.

Re: Is it insider trading if I bought Boeing puts while inside the wrecked airplane?

#182

Post by SoylentOrange »

labrador wrote: post #176
SoylentOrange wrote: post #166

Earlier quoted context omitted.

Unfortunately in this case the answer as written is completely wrong. See the top reply. > 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. Specifically this part. One of the first things you learn when doing mandatory insider trading training is you can easily run afoul of the law if you act…

The top reply currently for me is colinmorelli who says: > in this particular case is no, it's not insider trading You seem to be saying it could be, but that wouldn't mean the answer was "completely wrong" (your words)

The reasoning is totally wrong and while “no” is likely correct it’s more of a stopped clock sort of situation

Re: Is it insider trading if I bought Boeing puts while inside the wrecked airplane?

#183

Post by quickthrower2 »

ponector wrote: post #134
charlieflowers wrote: post #126

If members of Congress can make millions trading on info they get from sitting on key committees, then trading based on your first hand experience certainly should be ok.

But you know that law applies differently to poor people and to wealthy and powerful people? Whatever is ok for congressman could not be ok for you.

True but that goes beyond “is it illegal” to “will I be prosecuted for…”.

Interestingly here I reckon even if illegal it is a bad look to go after a survivor of this.

Re: Is it insider trading if I bought Boeing puts while inside the wrecked airplane?

#184

Post by philwelch »

filoleg wrote: post #43
philwelch wrote: post #17

This is a good opportunity to point out that insider trading is a victimless crime. If you sell stock with insider knowledge, you sell it to someone who would have happily bought it at the same price or possibly a higher price from someone else anyway. The same is true if you buy stock with insider knowledge. The only net effect of insider trading is to make the market more efficient by pricing in otherwise inaccessi…

> This is a good opportunity to point out that insider trading is a victimless crime. It is a "victimless crime" in the same sense as selling someone a house is, fully knowing that a pipe in the basement is going to burst 6-12 months later and not disclosing it to the buyer (which would've made the house value go down, if the buyer knew it). That "someone who would have happily bought it at the same price or possibly…

> That "someone who would have happily bought it at the same price or possibly a higher price" is someone who wouldn't have done it, knowing what the insider knows, they would've waited.

If you are the prevented from selling a particular house without disclosing some fault in the house, the buyer is prevented from buying that particular house. On the other hand, if I am aware of some fault in Apple Inc. and am prohibited or prevented from selling my AAPL shares, the buyers whom I would have sold to will not only still buy AAPL shares from someone else, they will likely pay a higher price for them!

Again, if the law required corporations to publicly reveal, as soon as possible, any and all insider information that may potentially influence the company’s market valuation, that would be one thing. Instead, not only are they not required to do that, but the information is not even allowed to leak out onto the markets in the form of insider sales which would depress the stock price and tip off investors that, even if they don’t know exactly what it is, that something is wrong with the company.

Re: Is it insider trading if I bought Boeing puts while inside the wrecked airplane?

#186

Post by modeless »

jeffbee wrote: post #149
Retric wrote: post #129

Earlier quoted context omitted.

That’s not quite correct, it depends on the nature of the disclosure. Someone receiving information from an insider needs be independent of personal, financial, and quid pro quo relationships. So a random person that happens to sit next to a CEO on an airplane can trade on whatever they hear. The CEO’s mistress sitting on the other side of them can’t.

This exact scenario happened to me. I was flying United business class SFO to EWR and the guy next to me was writing a Powerpoint slide in 9000-point bold type "BUY XYZ CORP FOR 880 MILLION" and when I got to work a few hours later our counsel advised me that it was not at all improper to trade on that information, which we did.

... but did you make money on it?

Re: Is it insider trading if I bought Boeing puts while inside the wrecked airplane?

#188

Post by motohagiography »

Already imagining a black mirror Nosedive app that recognizes products in your location and environment and presents offers to buy or sell the stock of the companies that produce them based on your experiences of the produts in the moment.

The irony is of course is the adage, "Hate the service? Buy the stock" because it's so valuable people use it in spite of it sucking. Nobody ever thinks, 'this is terrible, how do I get long?' or, 'this is so awesome it can't possibly last, how to get short?', but that's how some traders make a living.

Re: Is it insider trading if I bought Boeing puts while inside the wrecked airplane?

#189

Post by anonu »

The incident occurred at 526pm local time on the West Coast, so markets were closed. You wouldn't be able to trade.

I'm a bit surprised that question is being asked. Fundamental investing is all about understanding things about a company that nobody else knows. This is an age old approach to investing. If you happen to stumble on that information, it doesn't make it insider trading.

Where is crosses the line is if you're an insider and effectively breach your duty to the company or as a fiduciary. You're effectively stealing from the company. A passenger on an airline cannot steal information.

Re: Is it insider trading if I bought Boeing puts while inside the wrecked airplane?

#190

Post by permo-w »

jedberg wrote: post #122

Of course not, because you learned the information yourself as an outsider. Just like the hedge funds that pay for satellite images of all of the WalMart parking lots in the country and count the cars to estimate year over year sales. It's information they have that no one else does, but they didn't get it from an insider.

this seems really obvious. you're not an insider if you're ... not an insider? how is this question even being considered
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