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Here is the relevant section. The “manipulative and deceptive devices” prohibited by Section 10(b) of the Act ( 15 U.S.C. 78j) and § 240.10b-5 thereunder include, among other things, the purchase or sale of a security of any issuer, on the basis of material nonpublic information about that security or issuer, in breach of a duty of trust or confidence that is owed directly, indirectly, or derivatively, to the issuer of that security or the shareholders of that issuer, or to any other person who is the source of the material nonpublic information. The list is long but not total. If you happen to overhear something at lunch one day that’s fair game. The chain can be long and thin but it needs to exist. Aka A lawyer who’s client is the husband of an accountant for a company trying to do a takeover and your out of luck. Now it’s safer to shorten that to non public information = off limits, but not accurate. https://www.americanbar.org/content/dam/aba/administrative/l... ‘The Court, however, determined that, for a tippee to be liable, “the insider personally [must] benefit, directly or indirectly, from his disclosure.”35 In the Dirks case, the insider who provided the confidential information did so to expose a fraud in the company, not for any personal benefit. Therefore, the Court held, the insider had not breached his duty to the company’s shareholders, so the defendant (tippee) in Dirks could not be liable for insider trading.‘ |