[KieranMac]

No, it is not. If you do not have a fiduciary relationship with Boeing and you have no confidentiality obligations with respect to the information, you are not trading on inside information. If you're in the plane when the door blows up, you're just the first person with material public information. You're not trading on material non-public information.

See, e.g.

https://www.law.cornell.edu/wex/misappropriation_theory_of_i...

[colinmorelli]

Important clarification: you do not need to have confidentiality obligations with respect to the information or a fiduciary relationship, it need only be information that is material and non-public information that belongs to the company (i.e. only available to those with a fiduciary responsibility or confidentiality obligation to the company). If an insider with confidentiality obligations shares material non-public information with a person who has no confidentiality obligation, and that person trades on that information, that would be insider trading.

The link you referenced also clarifies this point, but it is different from what is written in your comment.

Note: this doesn't change the fact that the answer in this particular case is no, it's not insider trading. You are, as parent mentioned, just the first to know the news.

[Retric]

That’s not quite correct, it depends on the nature of the disclosure.

Someone receiving information from an insider needs be independent of personal, financial, and quid pro quo relationships. So a random person that happens to sit next to a CEO on an airplane can trade on whatever they hear. The CEO’s mistress sitting on the other side of them can’t.

[ClumsyPilot]

> it need only be information that is material and non-public.

I think this is wrong as well. Suppose you are a independent technician repairing cars. Over time you notice, that, say BMW car quality used to be good but has gone to shit. That's not public information, but you would be allowed to short BMW stock in the hopes that, once public catches on, their share price will tank.

In fact half the point of stock trading if for you to do research, including your own investigation and testing. And then use that as an advantage. In the process you are bringing the price close to it's true value.

P.S. nothing against BMW, just an example.

[porphyra]

What if you are on a plane and door blows out but the only other passenger on the plane happens to be a Boeing exec by sheer coincidence?

[dataflow]

What does "non-public" mean here? If some information gets leaked without authorization by an insider (like when people leak stuff online...), (when) does that become public?

[adrr]

What if you infer it from a person that does have a privilege position.

Here’s the scenario. During acquisitions, acquiring company sometimes use market research companies to reach out to former execs at the company as part of their diligence.

Can you trade long if you just receive a bunch of requests from market research firms but never actually talk to the acquiring company?

[jazzdev]

> If an insider with confidentiality obligations shares material non-public information with a person who has no confidentiality obligation, and that person trades on that information, that would be insider trading.

Is this transitive? If the person with no confidentiality tells a 3rd person and that 3rd person trades, is that still insider trading?

[paulsutter]

You're muddying the waters here, the original poster is correct, but with a few scenarios for outsiders. For example, a company that printed the financial statements of companies, had no NDAs, was trading on the data, and was convicted of insider trading because they knew the data was company confidential information.

Theft from the company is the central tenet, whether you are an insider, have a fiduciary responsibility, or an outsider who comes across data from inside the company.

Material nonpublic information that isn't taken from the company is fair game, thus all the quant funds that collect detailed market intelligence and trade on it (or the posted example, a passenger on the plane who knew the news ahead of the public). It doesnt matter one whit whether the information was material or public, it matters only that it wasn't taken from Boeing

EDIT: I was involved in the early days of a company that sold data to quant funds, and spent many hours with lawyers on exactly this question

[arsome]

This is just news trading, you're just really fast because you're the headline.

[mrb]

"If you do not have a fiduciary relationship with Boeing"

Ok so what if you are a Boeing executive or engineer on said flight?

[adrr]

Better question can the flight attendant buy puts? What about the air traffic controller who handled the emergency? It’s the exact same information.

This is where insider trading rules just don’t make sense. Here’s a good example. You can buy credit card data from Bloomberg that will give you near accurate information on revenue. For earnings, you can pay to see if a company will meet expectations and trade off that information. If you work for the company, it’s insider trading. If you work for the credit card companies and get the same info and trade on it, it is also insider trading.

Maybe we should make insider trading, trading off information that isn’t public.

[kortilla]

>Maybe we should make insider trading, trading off information that isn’t public.

This is stupid. It disincentivizes people who make a living externally auditing/investigating companies

[labrador]

I love answers like this because it clears up confusion in few words and makes the answer obvious in retrospect

[abm53]

It’s often a dangerous kind of answer.

I once saw somebody say something to the effect that in every Hacker News thread, there is always a highly upvoted comment that sounds completely plausible, well argued, made by somebody who appears highly qualified to answer, and that is completely incorrect.

I don’t think it’s always true, but it often is.

[SoylentOrange]

Unfortunately in this case the answer as written is completely wrong. See the top reply.

> If you do not have a fiduciary relationship with Boeing and you have no confidentiality obligations with respect to the information, you are not trading on inside information.

Specifically this part. One of the first things you learn when doing mandatory insider trading training is you can easily run afoul of the law if you act on non-public info you overheard, or happened to see by accident, even if it has to do with some company with which you are not affiliated. A common example is you’re in a coffee shop and see an upcoming earnings report on someone else’s laptop screen, then trade based on that information.

[zymhan]

This wasn't a question being posed to HN readers, it's a StackExchange post.