Share dealing dilemma

payless

I'm doing some reserach work on insider dealing - keen to get some general feelings to people's own attitudes:

You overhear a conversation in a pub between 2 businessmen predicting a take-over bid the XYZ plc at £15.00 per share. You gather from the conversation that these men are connected some way to this company" The current share price is £10.00. You have traded shares in the past but never in XYZ - would you use this information to buy shares in this company ?


( your answer is not indentifiable to your username to me nor general board viewers- can't say the same for board owners , but doubt they would care.. and its only a theory anyway) ..

Many thanks

ses6jwg

How do you know they are connected could just be two bloke speculating down the pub?

payless

lets just say the conversation makes its fairly clear they appear are high up executives for that firm, although of course you may base your answer on whether you think its a ruse - if in fact this would have any influence on your decision anyway

payless

bump ( to get some evening exposure)

purch

It would not be 'Insider Trading' to act on information in an overheard conversation.

In fact I doubt it would fall under the definition even if they told you directly.

payless

Purch - not disagreeing, ( do you have a quoted source ?)

that is the nuance of the question - its the different circumstances and peoples' attitudes that I am interested in.

purch

No...........................

tradetime

I agree with purch this would not qualify as insider trading by my understanding based on US securities laws, so the issue would then be simply about the reliability of the information. Although I would say the law is somewhat ambiguous under those circumstances.

payless

thanks for your comments- any more and more votes most welcome

turbobob

Theres a FSA fact sheet on market abuse here which briefly covers the rules for this country - http://www.fsa.gov.uk/pubs/public/market_abuse.pdf

TBH it's unclear to me whether the example would be "insider trading". It seems debatable. According to the sheet, if you act on information which you know, or "could be reasonably expected to know" is inside information, it suggests you could be done for it.

[Deleted User]

Hi,

I overheard a couple of stall holders at a market one day talking about a horse, village thief, next time out it won at 20/1, big brave me had only £2 on it.