What to do when you have access to inside news?

Discussion in 'Trading' started by qll, Aug 18, 2006.

  1. Only when he "guarantees" it :) Did you take my short GBP/CHF ?

     
    #51     Aug 19, 2006
  2. Crosses make me crosseyed, I don't trade that fancy :)
     
    #52     Aug 19, 2006
  3. gee maybe i should go to more country clubs and be a bathroom shoeshine attendant :D

    ... cheap cologne sir???
     
    #53     Aug 19, 2006
  4. like Rearden's M two minutes before the close type of recommendations ? lol

    two minutes for the average intellect here in ET would not be considered illegal imo but pure luck....



     
    #54     Aug 19, 2006
  5. I was hoping the sarcastic tone made it obvious I was joking. I've no love for the SEC [Pretorius/1991 sanction].
     
    #55     Aug 19, 2006
  6. That's the point I was going to make, if you did have inside info, have someone anonymously post a "tip" or "hunch" on some public forum, then act upon it claiming you just got desperate and took a shot.
     
    #56     Aug 19, 2006
  7. nkhoi

    nkhoi

    [​IMG]
     
    #57     Aug 19, 2006
  8. Pabst

    Pabst

    The law prohibits the use of "material" information. Makes no difference how it's obtained. If I overhear two strangers and act, I'm an "inside trader." In that instance is my action criminal? Of course not. But it is civil and I WILL be forced to pay a fine commiserate with my winnings. And if one lies as to how they received the tip they're screwed. Martha. Lying to Federal investigators, impeding a Federal investigation ect. VERY criminal.

    But yea OT you're right. There's FAR better "tips" than a companies earnings. How about the Business Week typesetter/printer who was convicted years ago of buying stocks mentioned by Dorfman in his next weeks column? A good scam while it lasted.......
     
    #58     Aug 20, 2006


  9. It definitely depends on how certain information is obtained. Old-dude was pretty spot on.

    This from my 1999 Standards of Practice Handbook from the CFA Institute:

    (I paraphrase this to quickly get to the point.)

    Example 2: Walsh is riding an elevator up to her office when she overhears the CFO say the past quarter earnings have unexpectedly and significantly dropped. CFO adds this will not be released to the public 'til next week. Walsh immediately calls her broker on her cell phone and tells her to sell the stock.

    Comment: Walsh has not violated Standard V(A) [violated prohibition against using material non-public info] because no duty was breached by either Walsh or the CFO when the information was overheard, and the information was not misappropriated.

    In a nutshell, it is insider trading only if you acquired a fiduciary duty upon reciept of the information, or if you stole the information.

    Another example:

    On here way home down the elevator Walsh overhears a cleaning woman tell a friend she found XYZ info while tooling around in the garbage bin. Walsh calls here broker.

    This is a violation because Walsh knew the info was 'misappropriated.'
     
    #59     Aug 20, 2006
  10. zdreg

    zdreg


    the above scenario is nonsense . the giveaway is that he expects to do it every quarter.

    "So that is $2 million profit per Q, or $8 million per year. "



    the originator of this thread has had one big laugh at the expense of those who honestly responded.

    one poster got it right when he said that a suitable candidate for a lobotomy had been found
     
    #60     Aug 20, 2006