Amusing Insider Trading Question

From TRUTH ON THE MARKET here's an interesting question about insider trading laws:

In yesterday’s New York Times Magazine, an anonymous reader posed the following question to The Ethicist:

I am a subspecialty physician without primary responsibility for patients. I consulted on the care of the C.E.O. of a major company, the seriousness of whose illness was not being fully disclosed to shareholders. I own stock in this company. Once I complete my consultation, may I ethically sell my shares, motivated by the information I gained as a doctor?

The Ethicist responded that “[m]edical ethics do not forbid this trade, but investor ethics — a curious phrase, given recent headlines — do, so you may not make this sale.” The Ethicist went on to explain that the trade would likely be deemed illegal insider trading under the misappropriation theory.

This response — medical ethics present no bar to this trade, but the misappropriation theory does — cannot be right. Here’s why:...

Read the whole thing for their explanation.

The real question, of course, is, "What company's CEO is having serious health problems!?!?"  (just kidding).

Comments

[Earvin Johnson]

Believe he cannot trade on this information and has an obligation to suggest the CEO disclose this info in order to make it public.

[Frank]

Check this insider trading site