# Insider Trading **URL:** \ **Category:** Factual Questions\ **Created:** [June 10, 2019, 4:49pm UTC](https://boards.straightdope.com/t/insider-trading/835308 "2019-06-10T16:49:48Z")\ **Posts on this page:** 7\ **Page:** 1
**Author:** ![tim-n-va](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/tim-n-va/32/3001_2.png) [@tim-n-va](https://boards.straightdope.com/u/tim-n-va)\ **Post date:** [June 10, 2019, 4:49pm UTC](https://boards.straightdope.com/t/insider-trading/835308/1 "2019-06-10T16:49:48Z")
Just a hypothetical: If you knew that a threat of tariff was going to be tweeted and you profited from the stock market fluctuation, is that illegal? Other than a tip, is that likely to be caught? Is there routine monitoring of large transactions? ---
**Author:** ![MDfive21](https://avatars.discourse-cdn.com/v4/letter/m/ecc23a/32.png) [@MDfive21](https://boards.straightdope.com/u/MDfive21)\ **Post date:** [June 10, 2019, 5:13pm UTC](https://boards.straightdope.com/t/insider-trading/835308/2 "2019-06-10T17:13:22Z")
if you traded based on material non-public information, you committed insider trading. that’s the broad definition. [What Is Insider Trading, and When Is It Legal?](https://www.investopedia.com/terms/i/insidertrading.asp) gives a few examples. generally tho, they’re not going to know about or go after your average schmo trading his IRA. however if you are connected casually to an ‘Associated Person’ with a securities or commodities license and that person leaks info to you, then is investigated, that person’s cel phone, emails etc will be reviewed and you might get a visit from the feds. [How the SEC Tracks Insider Trading](https://www.investopedia.com/articles/investing/021815/how-sec-tracks-insider-trading.asp) there’s a section in this one that describes how the SEC tracks insider trading. ---
**Author:** ![CookingWithGas](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cookingwithgas/32/485_2.png) [@CookingWithGas](https://boards.straightdope.com/u/CookingWithGas)\ **Post date:** [June 10, 2019, 5:40pm UTC](https://boards.straightdope.com/t/insider-trading/835308/3 "2019-06-10T17:40:59Z")
The thing that makes this scenario different than most other insider trading questions is that the information is about general economic conditions and not about a specific company or even necessarily a specific industry. The link above says > [@](#): > > The U.S. Securities and Exchange Commission (SEC) defines illegal insider trading as the “buying or selling a security, in breach of a fiduciary duty or other relationship of trust and confidence, on the basis of material, nonpublic information about the security.” The language “about the security” implies that the information is relevant to a specific security. IANAL but my interpretation would be: “Hey Cooking, Trump is going to tweet that he wants tariffs on Albanian imports.” I do some research and buy stock in U.S. companies that sell oil resins, an imported product from Albania that will now become more expensive to import. Trump sends the tweet, and once the market figures out what this means, my stocks go up. I would find this to be a gray area at most for insider trading. “Hey Cooking, Trump is going to tweet that Amazon should be broken up because they have effectively become a monopoly.” I do a massive short sale of Amazon stock. The tweet comes out, the stock drops, I make a tidy profit. This is almost certainly insider trading since advance knowledge of the tweet is material, nonpublic information about a specific security. (However, one could also make the case that Trump is guilty of stock manipulation.) ---
**Author:** ![Chronos](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/chronos/32/134_2.png) [@Chronos](https://boards.straightdope.com/u/Chronos)\ **Post date:** [June 10, 2019, 7:39pm UTC](https://boards.straightdope.com/t/insider-trading/835308/4 "2019-06-10T19:39:13Z")
But couldn’t the fact that the Albanian tariffs would disproportionately affect oil resin companies, but not companies in most other industries, be construed as “specific”? ---
**Author:** ![Dahu](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dahu/32/3416_2.png) [@Dahu](https://boards.straightdope.com/u/Dahu)\ **Post date:** [June 10, 2019, 7:42pm UTC](https://boards.straightdope.com/t/insider-trading/835308/5 "2019-06-10T19:42:24Z")
Why could Trump be guilty of stock manipulation in the Amazon example? If he’s going to try to break up Amazon he’d have to announce it somehow. ---
**Author:** ![SpoilerVirgin](https://avatars.discourse-cdn.com/v4/letter/s/4491bb/32.png) [@SpoilerVirgin](https://boards.straightdope.com/u/SpoilerVirgin)\ **Post date:** [June 10, 2019, 8:30pm UTC](https://boards.straightdope.com/t/insider-trading/835308/6 "2019-06-10T20:30:02Z")
> [@Dahu](#): > > Why could Trump be guilty of stock manipulation in the Amazon example? If he’s going to try to break up Amazon he’d have to announce it somehow. Yes, but if he told you in advance, that would be illegal tipping. Once the information becomes public, it’s fine for anyone to trade on it. It’s having non-public information and trading on it (or giving it to someone else who could potentially trade on it) that is illegal. ---
**Author:** ![tim-n-va](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/tim-n-va/32/3001_2.png) [@tim-n-va](https://boards.straightdope.com/u/tim-n-va)\ **Post date:** [June 10, 2019, 8:46pm UTC](https://boards.straightdope.com/t/insider-trading/835308/7 "2019-06-10T20:46:59Z")
Market swings based on presidential tweets is relatively new. Seeing the market drop in response to one tweet and recovery days later when the crisis resolves made me curious. Thanks for the answers. It did appear that the SEC monitoring focuses on activity in a single stock before and after a key event. Playing the markets as a whole would be difficult to detect.