December 11, 2017

Possible Insider Trading within the Tech World

“It has been discovered that there may be a problem with insider trading going on in Silicon Valley – with many of the new technology companies out there.


insider trading

Often, what happens is that the employees of these companies work together with other technology companies and they hear about potential breakthroughs, product announcements, or acquisitions before they are communicated the public.

They then take this information and use it in making a decision whether or not to invest in that company – essentially, trading on material, non-public information.

Under the Securities Exchange Act of 1934 it is illegal to use “”any deceptive device”" when making purchases and this would include information that has not been brought out to the public.

The only catch with this is that it is clearly defined when it comes to public companies, but leaves a lot of grey area when it comes to private ones like these technology companies.

This has been brought to the Securities and Exchange Commission’s attention and some of this trading is being looking at.”

For more information, visit http://www.cnbc.com/id/42377452

Speak Your Mind

*


*