Is receiving material non-public inside information illegal? Or is it only illegal if you were to trade on it before it is released to the general public?
I am not a lawyer. Anyone working in a company has insider information. The only ones who go to jail are those who trade on that knowledge.
There could be situations where gaining access to material nonpublic information might be illegal standing alone, but the SEC regulations only apply to using it to trade. That can include passing it on to others who use it to trade. As someone else noted, corporate insiders have routine access to nonpublic information. They only violate the law if they trade on it or otherwise misuse it.
This is my favorite insider trading case, in a nutshell. So if an insider calls up a shareholder and tells you non public information and says "ha ha fuck you nothing you can do about it" what's a guy to do? I agree with Cuban. "He said watch me and sold his stock. ------------------------------------ Mamma.comâs chief executive had asked Mr. Cuban, who already owned about 6 percent of the company, if he was interested in participating in a new share offering. According to the S.E.C., Mr. Cuban declined. The commission says that the next day, Mr. Cuban dumped all of his shares, avoiding a $750,000 loss. http://dealbook.nytimes.com/2013/03/05/mark-cuban-may-face-s-e-c-insider-trading-trial/