I thought that Monday’s class was very interesting. I very much enjoyed the color copies Mr. Hintz had for us. I also liked the conversation we had, namely, discussing the ethics and legality of insider trading.
I didn’t say it then, but I empathized with Chris’ point. While I understand that insider trading is illegal, it is unfair that someone who unintentionally overhears something is forbidden to act on it. For instance, if I was planning on selling stock X, and then, right before I did, I heard that stock X had a bad earnings report that was set to come out next week, can I sell anyway?
The consensus from the class was No. I think it is a more difficult question than that. To me, the people I overheard talking about the stock unfairly penalized me by letting me know. Additionally, to me, if I was planning on selling the stock anyway, I don’t see the moral issue.
On the other hand, if I heard my son’s college fund was about to take a hit, could I do anything then? Probably not. Insider information only becomes relevant when it changes your course of action. For instance, if I had heard that stock X was going to go up 20 dollars next week, and I decided to wait to sell until then, that would be morally wrong.
These are the questions we discuss in PLA, and I’m glad for it.