Trading on News Before It’s Published
Also annuities, antitrust and yacht leather.
If a journalist is writing a column about a company, and the column is likely to make the company’s stock go up, and the journalist tells an investor about the column before it is published, and that investor goes and buys the stock and profits when the column comes out: Is that insider trading?
There is a famous case: A Wall Street Journal columnist named Foster Winans had a deal with some stockbrokers to share his column with them in advance so they could trade and split the profits. The courts decided that this was illegal insider trading, even though there was not, strictly speaking, any “inside” information about companies. The journalist had information that was material (his columns were market-moving) and nonpublic (they hadn’t been published yet), and he had a duty — to the Journal — not to misuse them for his personal profit. He did, so it was illegal.