From: Jeff Barber <jeffb@sware.com>
Date: Tue, 4 Jun 1996 16:08:34 +0800
To: perry@piermont.com
Subject: Re: Saw this on CNN: Anonymous Stock tips over IRC as bad???
In-Reply-To: <199606032029.QAA05821@jekyll.piermont.com>
Message-ID: <199606040227.WAA16036@jafar.sware.com>
MIME-Version: 1.0
Content-Type: text/plain


Perry E. Metzger writes:

> Jeff Barber writes:

> > So perhaps Tim over-simplified by saying that there were no limits on
> > what ordinary employees could do.  OTOH, it seems that Perry also
> > over-simplified by flatly stating that Tim's trades while an Intel
> > employee were "illegal".
> 
> First of all, I never said that Tim's trades were illegal -- indeed, I
> never mentioned Tim except to say that following his advice didn't
> seem like a particularly safe course to take. Second of all, I can't
> comment on whether Tim's trades were within the letter of the law or
> not. Indeed, it would be difficult even if one knew all the
> circumstances since the definition of "material non-public
> information" is so hard to pin down.

In response to Tim's message wherein he described trading in Intel
stock while an employee there, you wrote (in message
<199606031523.LAA05288@jekyll.piermont.com>):

> >                          Under the rules, if you have nonpublic
> > information, even if you are not a corporate officer, you are an
> > insider for purposes of "insider trading" and your trades are illegal.

Sorry if I misinterpreted this.


> The point of all this was not that one shouldn't participate in the
> employee payroll stock purchase plan. The point was that a random
> person on the street who gets told a 'hot tip' is probably subject to
> the insider trading laws, never mind that he wasn't an employee or
> what is conventionally thought to be an "insider".

OK.  The only point I want to make is that thousands of us do this to
some extent every year and the risk apparently isn't terribly high.
Each person who works for a large corporation has *some* "non-public
information" which helps them decide whether to participate in the
stock purchase plan next year.  (Obviously if I think the company's
going to tank, I won't buy any more shares.)  I haven't seen anyone
attempt to define "material" but I'll concede that it's vague enough
to be dangerous to anyone whose trades are large enough to attract
attention.


-- Jeff