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1996-06-03 - Re: Saw this on CNN: Anonymous Stock tips over IRC as bad???

Header Data

From: Jeff Barber <jeffb@sware.com>
To: perry@piermont.com
Message Hash: f62158d4e6fec55ebf0e17168d06fa57f71d6f047f52865bec4a009cf07db5eb
Message ID: <199606031507.LAA15317@jafar.sware.com>
Reply To: <199606031523.LAA05288@jekyll.piermont.com>
UTC Datetime: 1996-06-03 22:22:54 UTC
Raw Date: Tue, 4 Jun 1996 06:22:54 +0800

Raw message

From: Jeff Barber <jeffb@sware.com>
Date: Tue, 4 Jun 1996 06:22:54 +0800
To: perry@piermont.com
Subject: Re: Saw this on CNN: Anonymous Stock tips over IRC as bad???
In-Reply-To: <199606031523.LAA05288@jekyll.piermont.com>
Message-ID: <199606031507.LAA15317@jafar.sware.com>
MIME-Version: 1.0
Content-Type: text/plain


Perry E. Metzger writes:

> Timothy C. May writes:

> > And, how can someone who acts on overheard information--as in the elevator
> > example Sandy cited--be charged with any crime? Unless they are "insiders,"
> > covered by SEC rules about trading, they are free to act on essentially
> > anything they hear.
> 
> No, I'm afraid they aren't. 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.

> > (To elaborate on this: I was never classified as an "insider" during my
> > time at Intel, and I certainly bought and sold the stock based on what
> > products and news I knew was coming out or what rumors I'd heard. Only a
> > select group of executives and staff in the specific departments generating
> > earnings announcements, auditing, etc., were covered.
> 
> Only they were covered by the rules that require registration of all
> trades, you mean. You are completely confusing two uses of the word
> "insider".

IANAL, but I think you must be wrong about this, Perry.  If this were
the case then, as an employee of company XYZ, I would never be permitted
to buy XYZ stock (which is clearly not the case) since I *always* have
information that others outside the company do not (about staff changes,
product plans and such).  I suspect the deciding factor must have to do
with the ability to execute actions which have substantial direct effects
on the stock price (i.e. buying a company, declaring dividends, having a
massive downsizing, etc.).


-- Jeff

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