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The issue is did anyone trade based on the information. Then it would be considered insider trading.

For example, lets say that you work at Apple. Walking down the hallway one day you see Tim Cook trip and fall on the way to the lunch area. The fall is really bad and he is unconscious and bleeding heavily. If you immediately sell your Apple stocks based on that, that would be insider trading.

discuss

wutbrodo|6 years ago

This is because you work at Apple, and are thus privy to info like that. The hedge funds who would've traded aren't insiders, so a better analogy would be a non-Apple-employee seeing Tim Cook trip and fall somewhere in Cupertino and then buying Apple puts.

The information shouldn't have been leaked, but if it wasn't illegal to do so, then I don't see how the funds who traded on the info could be liable in any way.

gruez|6 years ago

>would be a non-Apple-employee seeing Tim Cook trip and fall somewhere in Cupertino and then buying Apple puts.

this isn't really a good analogy either, because the people who got "discovered" the information had no relationship with Cook or Apple. In this case, the company who's providing the information had a relationship with the BOE because they were contracted to provide the stream.

>The information shouldn't have been leaked, but if it wasn't illegal to do so, then I don't see how the funds who traded on the info could be liable in any way.

depends on the jurisdiction:

>In the United States and many other jurisdictions, however, "insiders" are not just limited to corporate officials and major shareholders where illegal insider trading is concerned but can include any individual who trades shares based on material non-public information in violation of some duty of trust. This duty may be imputed; for example, in many jurisdictions, in cases of where a corporate insider "tips" a friend about non-public information likely to have an effect on the company's share price, the duty the corporate insider owes the company is now imputed to the friend and the friend violates a duty to the company if he trades on the basis of this information.

https://en.wikipedia.org/wiki/Insider_trading