It doesn't matter if you overheard it at a bar or if you're just some HN comment... (2024)

> the law prohibits trading on material nonpublic information.

Isn’t it public information the moment it’s said audibly in a public space?

No. It's not. However, as pointed out elsewhere, you can trade on many types of non-public information. Indeed, hedge funds engage in all sorts of surveillance in order to get non-public material information to trade on which gives them a proprietary edge.

You just can't trade on insider information.

That's a very complex legal line.

You're an idiot.

https://www.kiplinger.com/article/investing/t052-c008-s001-w...

Case #1.

Unless you earn enough money to retain good lawyers and are prepared to get into complicated legal troubles, getting sued isn't a great outcome even if you win.

The prudent thing to do is to stay away from anything that might make you become a target of investigation, unless the gains outweigh the risk by a significant margin.

Feel free to share some legal precedence where this situation has fared poorly for someone who "overheard it at a bar".

It'd also be a good time to watch you lose all that money on your hokey-pokey assumption.

Roughly, it's illegal only if you have some duty not to trade on it. If you acquired the information without misappropriating it (like overhearing it from strangers in a normal public bar), then you're free to trade.

https://corpgov.law.harvard.edu/2017/01/18/insider-trading-l...

There's no reason for normal corporate training to discuss that element, because an employee who trades their employer's stock based on MNPI has near-certainly misappropriated it. The question of whether a non-employee has misappropriated information is much more complex, though.

Training is designed to protect the corporation, not to provide accurate lega ladvice. That's true of most corporate trainings, for that matter, be that bribes / corruption, harassment, discrimination, or whatnot. Corporations want employees very far from the line.

That's the right way to run them.

If you want more nuance, talk to a lawyer or read case law.

Generally, insider trading requires something along the lines of a fiduciary duty to keep the information secret, albeit a very weak one. I'm not going to slice that line, but you see references in-thread.