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Opinion
Matt Levine

Insiders Trade in Outside Companies

Also Revlon blockers, expensive emails and a meme stock rally.

We talked on Monday about a U.S. Securities and Exchange Commission insider trading case against a guy who allegedly worked at a public company (Medivation Inc.), learned through his job that his company was about to be acquired, and went out and bought call options on another company (Incyte Corp., a biotech company similar to Medivation), presumably on the theory that:

The first part was correct — Incyte’s stock went up when Medivation announced its merger, and he made money — but the second part was not. The SEC sued him for insider trading, arguing that (1) the information he had was material to Incyte’s stock and (2) he had a duty to Medivation to keep it confidential. This was a learning experience for all of us, really.