Dirks Test

What's the square root of pi? Yeah, okay...different test.

The standard that makes Securities and Exchange Commission (SEC) enforcers rub their hands together with glee is, in fact, the real Dirks Test. Turn your head. Cough.

The Dirks Test establishes the criteria for what constitutes insider trading. It's named after a 1984 Supreme Court ruling, Dirks v. SEC.

According to the Dirks Test, an individual can be found guilty of insider trading if they meet two criteria: first, they breached their fiduciary duty to a company by disclosing nonpublic information, and second, they did so knowingly.

Did they whisper about the company being bought by Microsoft at the beauty shop? Did they nudge nudge and wink wink to juuuust lead would-be buyers of the shares to do so..."risklessly"?

Should they have known better? That's all part of the Dirks Test. Know what you can know; and tell others the same. Otherwise, hope you look good in stripes.