Hacker News Reader

Comment by dehrmann | Hacker News Reader

> Insider trading is one of those crimes where it is a bit ambiguous as to what the crime is (at least to me)

Before someone is quick to say "how can you not know?!," there are some pretty ambiguous cases around trading on material, non-public information.

- Counting cars in parking lots as a proxy for sales.

- Your employer sees a drop in sales and is able to directly attribute it to a competitor. Can you buy shares in the competitor?

- You're at a bar in NYC and a drunk i-banker is trying to impress a girl and runs his mouth and talks about a pending acquisition.

View on HN

Came here to say this. Everyone on HN likes to think they understand the nuances of insider trading but the reality is that the law is woefully unclear, highly fact dependent, and constantly changing with each new case. These are wealthy defendants so they can afford to appeal and throw all kinds of legal arguments out there and see what sticks.

It is ambiguous.

The only thing I can say with absolute certainty about insider trading is that anyone who can confidently say XYZ is or isn’t insider trading doesn’t know what they’re talking about.

Not only is it ambiguous, it changes. Insider trading also need to come with an exchange of value. But we’ve been litigating for decades what that means. Is friendship value? Is admiration value? These things actually change over time.

Agreed, but the parking lot example seems like a clear example of public information.

The first one is not really ambiguous: if you work at a hedge fund and received satellite images from your employer trading using this information is insider trading because you were supposed to do your job and do it for your employer. If you are a day trader and bought the images yourself it's ok.

I agree that the second one seems ambiguous and could certainly result in a lawsuit in the shareholders are unhappy.

I don't think the third one is insider trading, the banker had a duty to keep this information confidential, not you and you did not colluded. This looks a bit like the loan to Kodak that got leaked in the press because they had forgot to embargoed it. While it certainly not good looking for employees of the company to trade on this information, what could possibly reproached to outsiders once this news is all over the Internet? Even after the initial tweet had been removed, the news was out their.

Reply on news.ycombinator.com