I guess this could apply to a number of professions, but the first that came to mind was doctors. If I am Steve Jobs’ physician, and I find that his lab results show a turn for the worse, can I sell all my apple stock before the news hits? I assume this information would be considered “nonpublic”, and therefore I would be in trouble because of our relationship. Would it be different if I were a different doctor in the same offices (my own practice though), or just went to the same doctor and saw him leave through the waiting room in visible distress? If that is too nonpublic, what if I saw him in a car accident? (Sorry Steve, I really only wish good things for you!)
I got my info from http://en.wikipedia.org/wiki/Insider_trading. It looks like, other than a “tender offer”, I can act on information I acquire incidentally from a company officer. Should I start scheming to run a hedge fund based on police/EMT radio monitoring and subsequent shorting of major companies with high-profile execs?
For insider trading public information essentially means information available to the public and not that everyone knows it. So the car accident case is not insider trading at all nor would be seeing Jobs in distress. The restrictions on those who have a fiduciary responsibility to the company are a bit stricter. So Jobs himself could not trade on material information that was “available to the public” without disseminating it. That is, saying, “Well I’d have told anyone who asked.” is not sufficient
Those who get the information directly from those who do have a fiduciary responsibility to the company are also more restricted. I’m guessing that if Job’s doctor had information from Jobs that was not publicly known, that this would qualify as insider information if it were material.
I do know that many years ago a printing firm that printed financial prospectuses, etc. was found not guilty of insider trading since they had no fiduciary responsibility, but that the laws or regulations were changed to cover such people.
No, not true. “Insider trading” refers to trading on inside information, not to being an insider yourself. If an executive at the company secretly tells you the next quarter’s profits will be particularly good/bad and you trade on that information, then you are guilty of insider trading even if you are not an insider of the company yourself.
The “Steve Jobs in a car crash” question is a little bit of a gray area, and I’m sure lawyers would argue it both ways, but I would say no, it’s not insider trading. Circumstances matter, though. If you were Steve Jobs chauffeur, then it would almost certainly be insider trading. If you were just some random doctor, though, then it wouldn’t be inside information, it would merely be publicly available information which is not yet widely known. There is a difference between the two.