• We’re currently investigating an issue related to the forum theme and styling that is impacting page layout and visual formatting. The problem has been identified, and we are actively working on a resolution. There is no impact to user data or functionality, this is strictly a front-end display issue. We’ll post an update once the fix has been deployed. Thanks for your patience while we get this sorted.

Insider Trading?

M

manlymatt83

Lifer
A company I work for has been using the services of another company. I've always wanted to invest in said company (long term, as in a hold of 5+ years). I don't think I know anything that someone else couldn't find out, but I definitely know a lot because of how I use them and the people I've been able to talk to.

Is it possible to invest in this company without being labeled as insider trading? If I were to buy consistently over a long period of time and dollar cost average would that help steer myself clear of that?
 
To be considered insider trading it has to be material non-public information. For example, if you can influence the company getting a new project that can increase its revenues by 10% and you trade on it prior to it being announced and disseminated into the public, it's insider information.

It doesn't sound like you know anything material.
 
It's a potential ethical issue. If your company ceases the service of said company would you sell the stock? Would your investment in that company cause you to be more inclined to continue its services?
 
TuxDave said:
It's a potential ethical issue. If your company ceases the service of said company would you sell the stock? Would your investment in that company cause you to be more inclined to continue its services?
Click to expand...

No. I wanted to invest in the company well before I started working here, I just never did. What's the safest way I could do this? If I can commit to holding this stock for years, no matter what happens to the price (I mean, unless it really tanks), can I buy now and just hold and be okay?
 
LegendKiller said:
To be considered insider trading it has to be material non-public information. For example, if you can influence the company getting a new project that can increase its revenues by 10% and you trade on it prior to it being announced and disseminated into the public, it's insider information.

It doesn't sound like you know anything material.
Click to expand...

This.
 
as long as you dont know anything that isnt material non-public information, and as long as you personally cant affect the relationship between the two companies, there's no problem with you buying their stock.

i guarantee it.
 
manlymatt83 said:
No. I wanted to invest in the company well before I started working here, I just never did. What's the safest way I could do this? If I can commit to holding this stock for years, no matter what happens to the price (I mean, unless it really tanks), can I buy now and just hold and be okay?
Click to expand...

It doesn't matter how you felt before. I guess I should have asked if you have any ability to affect the performance of the company you are investing in.
 
Riceninja said:
as long as you dont know anything that isnt material non-public information, and as long as you personally cant affect the relationship between the two companies, there's no problem with you buying their stock.

i guarantee it.
Click to expand...

I can personally affect the relationship. I'm part of the committee that determines whether or not my company uses them or not...
 
manlymatt83 said:
I can personally affect the relationship. I'm part of the committee that determines whether or not my company uses them or not...
Click to expand...

I'm no lawyer and can only say what I got out of my company's ethics class but it sounds like a conflict of interest to me.
 
It sounds like you're in a key position that can significantly affect the livelihood of your vendor. Believe it or not, it might not be a bad idea to get some clarifications from the SEC. I often call the IRS when I have complex tax questions that my accountant won't give conservative answers to.
 
manlymatt83 said:
I can personally affect the relationship. I'm part of the committee that determines whether or not my company uses them or not...
Click to expand...

in that case, you have to consider the size of the two companies, and the scale of the business between them in relation to their size, and the magnitude of your investment.

if its kpmg for example, and you're some medium sized local company using their auditing services, losing/retaining your business really isnt going to affect their stock. on the other hand, if you're considering honhai(foxconn) and you're on the board of apple then its a definite grey area. potentially illegal, definitely unethical.
 
Last edited:
You must log in or register to reply here.

TRENDING THREADS

Back
Top