Comment by kasey_junk | Hacker News Reader

Comment by kasey_junk | Hacker News Reader

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This is a bad analogy because it perpetuates a misconception of the basis of insider trading law (in the US).

Insider trading has nothing to do with having an information advantage. The markets and their regulators encourage those with an information advantage to use it to as full advantage as they can.

Insider trading is based on having an economic obligation to someone else. If you use your knowledge to make money and you don’t share that equitably with the people you have that obligation to, that’s insider trading (in the US).

You’d have to torture that definition for it to make sense in the job market and none of the examples in the article match.

> you don’t share that equitably with the people you have that obligation to, that’s insider trading (in the US).

so if you simply tell the other shareholders to also participate in the insider trading, you'd be free of charges?

You'd have to tell all shareholders and potential shareholders the same information you have, i.e. make the information public, then it's no longer inside information.

but public implies public to non-shareholders too.

What if there's a secret communications channel for all current shareholders? Do these current shareholders offloading shares (to future shareholders) count as insider trading under this scenario?

Everyone is potentially a shareholder.

but you don't have any obligation to all potential shareholder as an insider, just the current shareholders. Which is what i was trying to get at with my comments.

what does "having an economic obligation to" mean in this context?

It’s a complicated legal area and it changes. The SEC prior to the current Trump administration took an extremely broad view of it and included all kinds of unintuitive relationships.

But the obvious one is if you are an employee of a company you owe the shareholders of the company due to your employment.

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