I was operating under the interpretation that the engineers worked for the company in question ("Company ABC"). Nonetheless, if these engineers were on that mining location with (different) "Company XYZ" 10 years before, I believe the questions to be asked to ascertain whether or not a 10b-5 violation exists are:
a) When the first company, ABC, found out that the land was barren, did they issue a press release stating such? Had there been any media coverage back then?
b) Did the first engineers sign a confidentiality agreement agreeing to safeguard information regarding their contracted work and findings with XYZ?
c) Is there a time threshold or limitation after/upon which material information becomes, for practical purposes, public? [A lurking attorney could help with this one - ]
The problem is that there are more factors to be considered than the example provided.
I am inclined to believe, as per a simple overview of 10b-5, that at the very least, the "disclose or abstain" guideline (re: misappropriation) applies, and that the engineers should either not trade on the information, or voluntarily disclose the basis for and origin of their unique, possibly privileged information either by PR or disclosure to the SEC before trading in the issue.
This, of course is an opinion.
Here is how you turned around the tire situation
Nothing was turned around, kodiak_bull. You posted an example, which I agreed was clearly not a 10b-5 situation, and I posted another. Nothing more than point, counterpoint. Not as a "straw man," but to make it clear to you that the factor which makes the "tires in a dump" example not an insider trading issue is the nature of the info: it constitutes publicly available (or reachable) "knowledge." That's all.
If someone, through good investigative work, determines that the Clintons are about to propose a health care plan which would materially deflate pharmaceutical stocks, publishes his opinion before any other analyst that MRK, LLY, et al would be excellent shorts, that is NOT privileged (where is the privilege?) information, even though it is material and nonpublic. No insider issues.
Where, in any of my past messages, did I suggest that this scenario would have insider ramifications? LOL! Obviously this information is not privileged - you say yourself that the information is gathered by doing investigative work, which implies the perusal of public information. I don't know what your point is.
If someone, through good investigative work and study of previous thermo-etc. maps, determines that pretty much all of OXY's leases are only going to yield water and nothing carbon-based, and publishes it on the Net, stating that shorting OXY is a no-brainer, that is NOT privileged (where is the privilege?) information, even though it is material and nonpublic. Let's say the company, CHV, publishes the information in its annual report that it's not willing to bid on leases #4007-4065 (the exact same leases which OXY is depending on!!) because its seismic/thermal work says there's no oil there at all, in fact it says there's less than zero chance of any hydrocarbons. Insider information? Where's the "insider"?
Again: there isn't a place in my previous messages where I've suggested that this scenario would be an example of privileged information. "Good investigative work," so long as it doesn't gather privileged information - nonpublic and material - is it's own reward, particularly in trading.
LPS5 |
