Comment by eru
2 months ago
> Insider trading consists of an individual who is an insider to a company that is publicly traded, trading stock in that company on information they obtained as an insider.
No, that's not true in US law. It doesn't have to be the stock of the company you work for to get you into insider trading trouble.
> Warren Buffett is not a publicly traded company, and in this hypothetical he is buying stock in another company, which (by assumption) he has no insider information about.
Well, that's why your definition is wrong.
> If it was about protecting shareholders (from what?) then it would apply to all companies.
Huh, what? You don't have a fiduciary duty to people you don't work for.
See https://en.wikipedia.org/wiki/Insider_trading#Misappropriati...
> The rationale for this prohibition of insider trading differs between countries and regions. Some view it as unfair to other investors in the market who do not have access to the information, as the investor with inside information can potentially make larger profits than an investor without such information.[2] However, insider trading is also prohibited to prevent the directors of a company (the insiders) from abusing a company's confidential information for the directors' personal gain.
Well, there you go. Any more questions?