It would not surprise me if we come to find out that some people in the know (not Twitter insiders) were stocking up on TWTR shares during the lawsuit drama. Wonder if SEC has any restrictions on non-insiders with material knowledge.
> This rule also covers any employee who has obtained material non-public corporate information, as well as any person who has received a “tip” from an Insider of the Company concerning information about the Company that is material and nonpublic, and trades (i.e. purchase or sells) the Company’s stock or other securities" [1]
The formal Insider Trading Policy applies to any person who has the information, for the purposes of this law Insider ( as defined in the first part) is materially same.
While you are half right that they are not "Insider" the law does not differentiate any person who got the information from the "Insider", so they are still a insider from the SEC regulations PoV and law applies to them if they trade on material non-public information obtained from a "tip".
[1]https://www.sec.gov/Archives/edgar/data/1164964/000101968715...
Provided you got the information legally.
Of the examples you cite:
Drone surveillance -> Probably illegal depending on local laws
clever analysis of public ID -> Likely legal, although given how CFAA is extremely loose on its interpretation of unlawful access I wouldn't be shocked if a prosecutor successfully argues that it was illegal .
Pretty sure acquiring it illegally doesn’t make you an insider, and you could still trade on it - albeit be liable for the crime you committed to get the info.
A famous recent example was the hack of press releases before they were released and used to make 100+M profit. [1] .
Note the SEC pursued this case not DoJ . SEC has only civil mandate and cannot pursue cases for hacking directly under CFAA which would be a criminal offense only the DoJ can and perhaps also did concurrently
"The SEC’s complaint charges each of the 32 defendants with violating federal antifraud laws and related SEC antifraud rules and seeks a final judgment ordering the defendants to pay penalties, return their allegedly ill-gotten gains with prejudgment interest, and be subject to permanent injunctions from future violations of the antifraud laws."
It's a bit confusing though, because earlier in the same article they seem to imply it's for insider trading. But they don't seem to actually say that's what they are being charged with.