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Insider Information in US SEC Laws


king888
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As innocent as the call may seem, you were provided privileged information that the general public may not have been given.  Use Buffett's rule:  If you are asking the question, then don't even do it! 

 

In my personal opinion, if you don't own the stock already, then don't buy.  And if you do own it already, then you should consider yourself precluded from selling for a period of time as well.  It's why investors should not speak to executives outside of conference calls, AGM's, investor presentations, etc.  It happens all the time and is hard to avoid, but it probably should not really be occurring.  Cheers!

 

 

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As innocent as the call may seem, you were provided privileged information that the general public may not have been given.  Use Buffett's rule:  If you are asking the question, then don't even do it!  

 

In my personal opinion, if you don't own the stock already, then don't buy.  And if you do own it already, then you should consider yourself precluded from selling for a period of time as well.  It's why investors should not speak to executives outside of conference calls, AGM's, investor presentations, etc.  It happens all the time and is hard to avoid, but it probably should not really be occurring.  Cheers!

 

Fully agree. King888 you should read through the CFA Ethics & Standards. This will assist you and provide you with a framework to answer these questions. In this case the test is whether your conversations led to "material, non-public information". Both those terms are defined and you can read through the code by going to the following link ...

 

http://www.investopedia.com/exam-guide/cfa-level-1/ethics-standards/standard-nonpublic-information.asp

 

Cheers,

 

<IV

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I assume (ass/u/me) that the info is available to anyone who calls, thus is it really inside info?  IF the CEO wouldn't talk to anyone else it would be "inside" - to me (and this is worth what this opinion costs you (0.00)) it isn't inside info, just good due diligence on your part.  Isn't this one of the senior Fishers steps?

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I assume (ass/u/me) that the info is available to anyone who calls, thus is it really inside info?  IF the CEO wouldn't talk to anyone else it would be "inside" - to me (and this is worth what this opinion costs you (0.00)) it isn't inside info, just good due diligence on your part.  Isn't this one of the senior Fishers steps?

 

If he provided material forward-looking information...projections on revenues, etc...then it would be considered inside information.  Buffett used to do the same thing back in the 50's and 60's.  Today it would considered insider trading!  I believe Alice Schroeder gave an example in her book.  Cheers!

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If you can find the information in the 10k or other filings then it would be considered public information. The revenue and GPM projections are not likely to be there and that would be insider information.

 

Perhaps the company has some investor presentations that aren't posted on the website. If they had the info and the company would post them it would be helpful to other investors. Sounds like they need some investor relations help.

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As innocent as the call may seem, you were provided privileged information that the general public may not have been given.  Use Buffett's rule:  If you are asking the question, then don't even do it! 

 

In my personal opinion, if you don't own the stock already, then don't buy.  And if you do own it already, then you should consider yourself precluded from selling for a period of time as well.  It's why investors should not speak to executives outside of conference calls, AGM's, investor presentations, etc.  It happens all the time and is hard to avoid, but it probably should not really be occurring.  Cheers!

Thank You Sanjeev for clarifying me. I still do not buy this stock.But I was curious about the ethical line. 

The practices in my country (Thailand) and US are very different. In Thailand, most of investors will not take sizable position in any companies unless they have talked/visited the management. In Thai investment forum, there was also some big retail investor posted he got a phone call from CEO noticing that company just bought a nice land for new development project and this news is not out the public release until end of quarter.And he posts this kind of news regularly because he is very big retail investor and got tips from many sources. It is thin line between scatter-butt and insider information. 

 

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