Actually, Patricia came the closest IMHO. Insider trading is using any information which is private within the corporation(s), and trading for gain on that information. Now, information which comes from several sources is a bit more tricky. The test is: Do you know that it is restricted information, or should you, based on the totality of the circumstances, know that it is restricted? If so, they you are a "Tipee" and the person who told you became the "tiper". Now, you tell someone else and you become the tiper and the next person the tipee.
A bit of history: In times gone past, the directors of a company were not paid. Instead, they were able to use inside info for their gain. In that way, they got paid. Then, abuses abounded and the legal brains decided that to give everyone an even playing field they would make it illegal and so now, you have directors with huge salaries ...
Now, with all of that said, lets discuss some events that make inside information not inside information. Lets say that someone sits next to an inebriated loose lipped attorney on a plane and learns some inside information through all of the Beefeater's. If that person uses that info for personal gain, then it is insider trading, BUT, once the information becomes public knowledge to the general public, then it is no longer inside information since all investors in that stock have access to the same knowledge. So that person posts on SI, and that post is openly available to ALL of the investing public (Which it is), then it is no longer inside information. It is unsubstantiated rumor and annectotal info. Once the company confirms it, then it is a release.
I realize that there is a fine line between who knows and if the general public knows, but it does not matter that the public actually knows, just that they could if they were so inclined to find it ...
Disclaimer: This is not legal advice, just my take on the situation after having just made a very good grade on my Corporations Final Exam three weeks ago.
Questions?
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