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Insider Trading Question - How 2 Prove It?

Thu Jan 08, 2004 5:49 pm

This is a fictitious example, so no stupid conclusions pleez.
Let's say I have some shares in company XXX, and I have a buddy's sister who also works there. So I have some info that company XXX will merge with YYY, so I run like a motherf.... to purchase a lot of YYY shares prior to the takeover.
Now, how can the stockmarket regulation agency (COB in France, for example), prove that I had any insider knowledge of this ?

UTA, wondering why he is thinking about that.
Fly to live, live to fly - Air France/KLM Flying Blue Platinum, BMI Diamond Club Gold, Emirates Skywards
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RE: Insider Trading Question - How 2 Prove It?

Thu Jan 08, 2004 6:57 pm

I wonder too...

but since I have no idea what you're talking about :

Posts: 1115
Joined: Mon Mar 04, 2002 8:12 pm

RE: Insider Trading Question - How 2 Prove It?

Thu Jan 08, 2004 9:08 pm

It's beyond me. I think insider trading is where you take advantage of information which is not generally available to other shareholders, and profit from it. But I always thought that stock market trading was based in part on guessing, smart knowledge, tips and, yes, information which some people can get hold of.
In the example you quote, if the person working for the company had used information which was not generally available and made a killing they could well have been prosecuted - although in that fictitious example, surely lots of other people would also have known/guessed. I think there are too many grey areas for insider trading allegations to be regarded as an exact science, or, in most cases, successfully prosecuted. But it's not my speical subject, and I am quite happy to be contradicted. (Hope you made a bundle, by the way)  Big thumbs up
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