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Actually, the real legal insider trading is the trades that you _don’t_ place based on insider knowledge. Eg, if you know that the iPhone is years ahead of everything else and you happen to be holding Apple stock, then you won’t let whoever is managing your portfolio sell any of it when otherwise you may not have cared. There’s no way to prove illegality for _not_ placing a trade.
There should be a name for this cognitive bias, not accounting for what someone is not doing.
There are explicit insider trading forms such as SEC forms 3, 4, and 5. Insiders are allowed to trade as long as it is declared to the government. The issue is with trading while having material non public information. Frequently trades are executed on an explicit schedule with rule 10b5-1 to act as a defense against accusations of trading on MNPI.
Also see the famous case of
https://en.wikipedia.org/wiki/Dave_Mustaine
who left Metallica to found Megadeth.
Genuine question, what inside info did he have?
Also
"Initial drummer Carruthers was replaced after Mustaine and Ellefson decided they could not trust him. Carruthers had chosen to hide his black heritage from them by claiming he was Spanish, and they could not understand why he would deceive them.Brett Frederickson joined the band in November 1983 as their next drummer."
That move probably hasn't aged well. Pretty nasty.
Edit: I can't recall which podcast I heard this, but ismtbhebthe guy that was sad that his band didn't sell as many records as Metallica?
Completely unrelated to the article claims.
Good article. I feel this way about my job :/
This is not an “insider trading”, it is an insider’s knowledge (affinity to knowledge) and ability to use it.
I read the article and I’m far more interested in talking about actual legal insider trading in the equities market
You may not be able to trade your company’s stock, or a competitor’s if you have knowledge that was under an employer agreement, but you can trade your sector and correlated assets
You can have an edge, it’s not a legal issue.
I assume you mean things like trade secrets that you cannot disclose? That is legal because it is not information that is confidential the same way as say financial results are. It is confidential, but for different reasons. It also tends to be much more long term information so people cannot make a quick profit from it. Its also impractical to regulate.
Unfortunately doesn't work that smoothly everywhere because outcomes are often tied to larger unknowns whether it is will AI bubble pop or will the global economy take a dip.
Access to internal data isn't a crystal ball