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by SteveNuts 1650 days ago
Stupid question, but is it still considered insider trading if the information gleaned is not directly from a company insider?

I mean, if a senator gets wind of upcoming legislation that may affect a specific company or sector, and they act on that, it's not insider information coming from someone within the affected company, so is that still considered insider?
2 comments
xboxnolifes 1649 days ago
I'd argue the knowledge of upcoming legislation itself is the insider information. It's not insider as in "inside the company's organization" but it is insider as in "inside the legislation organization". When it's your job to make decisions that can impact entire economic sectors, a lot of what you touch would be considered far more powerful insider information than most things that are considered insider information in a company.

Maybe it doesn't fall under current definitions of insider information (I'm not sure), but maybe it should.

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vlod 1650 days ago
I'm fairly certain it is. The way to think about it, do you have knowledge which isn't in the public domain which would give you an unfair trading advantage.

Here's some examples:

- In a closed door US senate committee, they are planning to stop all government vehicles from using fossil fuels. Stock of oil companies will mostly move.

- In a closed door US senate committee, they have decided to buy $50B of a vaccine from pharma provider FOO. Stock of FOO will likely move.

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troydavis 1650 days ago
> The way to think about it, do you have knowledge which isn't in the public domain which would give you an unfair trading advantage.

Matt Levine does a good job of explaining why that’s not the way to think about it: https://www.bloomberg.com/opinion/articles/2015-04-01/anothe...

As he’s stated many times, it’s about theft, not fairness. (Of course, there may be an argument that these examples are theft or a breach of trust or confidence.)

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