[sfifs]

> What stops from former workers at intelligence agencies from starting a hedge fund and employing all methods they learned while at work, to acquire such valuable information, trade based on that and offer others money management services?

That wouldn't be insider trading. Indeed hedge funds are known to use intelligence data like satellite photos etc.

If they use illegal monitoring devices, hacking for info etc, they may fall afoul of federal espionage, wiretapping or CFFA, but it would still not be insider trading.

[gpderetta]

> If they use illegal monitoring devices, hacking for info etc, they may fall afoul of federal espionage, wiretapping or CFFA, but it would still not be insider trading.

that would still be trading on material non public information which is prohibited.

[sokoloff]

I would hope that original/primary research would not result in insider trading charges. (If I have no other connection to a company and count cars in a retailer parking lot, foot traffic, or trucks leaving a warehouse and trade based on that information, I would expect and hope that those trades would be legal, even if the findings that I self-generated were material (and of course non-public).)

[gpderetta]

if the research is done with public information, of course there is no issue. If you go, for example, dumpster diving on shredded company documents then it might be an issue.

Note also that there are difference between US and EU. I think US might require a breach of duty of care somwhere in the chain of responsibilities for insider trading, while EU doesn't.

[rich_sasha]

> if they use illegal monitoring devices, hacking for info etc, they may fall afoul of federal espionage, wiretapping or CFFA, but it would still not be insider trading.

Thats an interesting point, if I hack the CEO’s phone and get the earnings number a day ahead, then trade off them, I kind of wonder how that isnt insider information.

Although laws around that are so odd, especially in US, that it wouldn’t surprise me.

[btown]

The SEC has historically treated hacked earnings reports as material non-public information, so the post you're replying to is incorrect: https://www.lexology.com/library/detail.aspx?g=fd5d5ca7-20c5...

(not a lawyer, not legal advice)