Material News
Categories: Ethics/Morals, Trading
See: Insider Trading.
You overhear the CFO of Tesla mumbling about a takeover. You recognize her from her magazine covers. (She used to be a World Wide Wrestling star.) It turns out, it seems, that Apple is, in fact, buying Tesla to build iCars that are basically KITT from Knight Rider. This is material news to both TSLA and to AAPL. You now have material inside info.
You can't buy (or short) either stock or really do anything with them. You can't tell a friend. You can't hint to a friend. You can't do really anything with this material news other than keep your mouth shut...unless you really want to date Bubba behind bars, and think stripes on you are slimming.
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Finance: What are Insider Trading And th...11 Views
Finance a la shmoop what is insider trading and the securities fraud
Enforcement Act of 1988? all right well the Securities and Exchange Act of 1934
aka the 34 Act made it formally illegal to use inside information in trading
stocks amazingly that used to not be illegal or at least not explicitly so [People gambling]
and it wasn't enforced investing was well a clubby white man's insiders gig
and the boys took care of the boys well since people could make a lot of
money with insider information and thought they wouldn't get caught like [Boy peeing at a urinal]
well who's gonna know that I overheard the CEO of big company talking about a
merger in a Denny's washroom you know some folks pretty much ignored
the law well the 1988 law was basically Congress saying you guys were really [Congressman discussing the 1988 law]
serious about this so this new legislation added some hefty penalties
if you get caught as an inside trader people still trade on insider
information though and they still get caught and they go to jail and they lose [Jail door closes on man]
everything they have so he's got to realize some of us were just born to be
bad...