SEC Charges Cardiologist With Insider Trading on Confidential Drug Trial Developments

[Xela]

the law doesn't clearly define insider trading.

Like many legal concepts and practicalities, Zdreg, that actually varies hugely from country to country: in some places it's almost entirely undefined and established only by precedent; in others, it's almost entirely and strictly defined by statute, with very little room for precedent-based interpretation.

 

[Zestilio]

the law doesn't clearly define insider trading. it is like pornography. a supreme court justice once said I can't define it but I know it when I see it.

Haha, so true. I guess you'll have to use intuition for both cases

 

[Zestilio]

The definition is pretty clearly defined, you can read it for yourself at http://www.ecfr.gov/cgi-bin/text-id...8&view=text&node=17:3.0.1.1.1.1.66.95&idno=17 and http://www.ecfr.gov/cgi-bin/text-id...8&view=text&node=17:3.0.1.1.1.1.66.96&idno=17
In general illegal insider trading occurs if "a person trades on the basis of material nonpublic information if a trader is "aware" of the material nonpublic information when making the purchase or sale." As to ignoring the facts and losing money, absolutely that's what you have to do if you took the risk of purchasing securities in which you have insider knowledge. If you can't handle that, don't trade in securities where you might have insider knowledge.

So why wouldn't you forbid such trading at all, rather than sueing people for not agreeing to lose a trade you've allowed them to do?

 

[Sig]

So why wouldn't you forbid such trading at all, rather than sueing people for not agreeing to lose a trade you've allowed them to do?

Sorry, I don't understand what you're trying to convey. If you mean banning all ownership of your own company's stock, then you'd pretty much be throwing out the entire entrepreneurial business model of the U.S. and would ensure that most of the startups that are now public companies (from Microsoft and Google to Amazon and Intel) wouldn't have happened.

 

[Zestilio]

Sorry, I don't understand what you're trying to convey. If you mean banning all ownership of your own company's stock, then you'd pretty much be throwing out the entire entrepreneurial business model of the U.S. and would ensure that most of the startups that are now public companies (from Microsoft and Google to Amazon and Intel) wouldn't have happened.

Well, point taken, I guess that was dumb of me. It's just that I feel this concept of "inside trading is bad, you should accept the losses even if you know about them and could avoid it" is quite wrong.