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Strategies & Market Trends : Anthony @ Equity Investigations, Dear Anthony, -- Ignore unavailable to you. Want to Upgrade?

To: Buckey who wrote (105360)	11/26/2008 12:32:56 AM
From: Jeffrey S. Mitchell	Respond to of 122087

I've been doing lots of reading[1] about what is and is not supposed to be insider trading. It's now sounding like the legal definition of pornography: We know it when we see it. What it boils down to in plain language is that insider trading is the exploitation of illicitly obtained non-public information for profit. For example, if an insider tells you his company is a scam and you short it, according to Dirks v SEC, as long as the tipper himself wasn't trying to profit (i.e. the information was not obtained illicitly), you are not in violation of any insider trading laws. More likely it was just plain old good DD on your part. Per your example: "So lets just say I didnt sell MY GD @#$%^&*(+)_(&%^$ Citigroup at 3.99 Friday and had lunch my uncle friday who is C CEO and he told me they had a fed meeting on the weekend and I went long FRiday I would absolutely be subject to insdier trading charges." First off, we're assuming here that your uncle expected the Fed to bail his company out and thus the price would rise significantly. If you got caught, your uncle could be hit with a Reg FD violation. He'd probably argue that you being his nephew implied a certain trust not present if you were just a friend, and thus his actions were not negligent. If that argument was accepted, you'd be screwed for having exploited this trust. But if the guy were someone you coincidentally met sitting on a park bench, he'd be screwed and you'd probably be OK even if you promised not to tell anyone. In my non-lawyerly opinion of course! - Jeff [1] Good SEC reference: sec.gov