Comment by derefr
8 years ago
I was thinking specifically of a case mentioned previously here on HN, where someone cancelled a monthly scheduled partial stock-liquidation event on corporate-internal news that the company's value would change. IIRC the law said that this was insider trading: there was an evidence trail proving that the trade would have been executed, if not for corporate-internal knowledge.
I guess you could phrase this more clearly as: never investigating a trade in the first place can't be insider trading; but proposing/planning/scheduling a trade and then cancelling that trade, can be insider trading. Where, as well, choosing to execute a competing trade can be considered to cancel the trade that would have been executed in its place.
Ahh but that’s because the point of putting the trades on automatic is what allows insiders to trade even though they have inside information. As soon as you put trades on manual you’re opening yourself up to use inside information.
I don’t remember the story, but you can imagine a situation where you scheduled a big buy a year in advance right before earnings. You’ve done this consistently for a few years, and it’s paid off for you. The company has grown consistent quarter after quarter. Only now, this year right before the earnings call, you cancel the purchase.
Now tell me, do you think the company’s earnings exceeded expectations?