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I need some legal information about Insider Trading - Gathering TSLA information

Discussion in 'TSLA Investor Discussions' started by MitchJi, Sep 9, 2015.

  1. MitchJi

    MitchJi Active Member

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    #1 MitchJi, Sep 9, 2015
    Last edited: Sep 9, 2015
    Hi,

    I think I can find a Tesla employee who can supply us with information like the following (I think the odds are about 90%), but before I do that I need some information about the legalities of Insider Trading:
    http://www.streetinsider.com/Analyst+Comments/Tesla+%28TSLA%29+Optimism+Expected+to+Grow+into+Model+X+Launch%2C+Factory+Gearing+Up+-+Pacific+Crest+/10681668.html
    I think that having regular access to this type of information would be extremely useful. But I don't want to ask anyone to do anything illegal, or get anyone in trouble for illegally disclosing insider information and I'm not sure exactly what crosses that line. My first thought was that only high level employee's would have access to that type of information, but it doesn't look like that is correct:
    http://www.sec.gov/answers/insider.htm
    http://www.investopedia.com/articles/03/100803.asp
    It looks like I need a legal definition of material nonpublic information.

    EDIT ADDITION:Would posting on the forum convert illegal "nonpublic information", to legal public information? Would doing that displease Tesla? And would it be allowed on TMC?

    I'm not concerned with morality of using this type of information for making trades. Analysts obtain and use exactly the type of nonpublic information that I want to obtain. Since 100% of that information is not immediately made available I don't think it is wrong to at least try to obtain a level playing field.

    A related question, is If I can find someone, I don't know how to quietly share the information with others on the forum. If it's useful information I would be happy to share it with this community, but I don't want to start a feeding frenzy type of scenario.
     
  2. dhrivnak

    dhrivnak Active Member

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    At my company, according to our annual ethics training. We would consider that unethical and would be grounds for dismissal. But I do not work at Tesla.
     
  3. yobigd20

    yobigd20 Well-Known Member

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    just that statement alone sets off red flags that what you're trying to do probably isn't legal. i would think any kind of inside confidential information that the general public doesn't have access to would be considered "material, nonpublic information". this would include those kinds of statements from internal employees.
     
  4. drinkerofkoolaid

    drinkerofkoolaid Active Member

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    #4 drinkerofkoolaid, Sep 9, 2015
    Last edited: Sep 9, 2015
    Does the analyst own any shares of Tesla Motors? Probably no.

    This is part of the reason why many companies have a policy that journalists they employ are not allowed to own shares of companies they report on.
     
  5. hockeythug

    hockeythug Active Member

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    This. Also, I wouldn't call what the analyst wrote material or nonpublic. Tesla has publically stated that a second production line was being build and has given production guidance. He could be guilty of adding a little color but that is all.
     
  6. austinEV

    austinEV Active Member

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    My understanding of "the line" is this: if you walk by the factory and see through a window that they are making an electric plane, you could post that and/or trade on it. It is material insider info, but you aren't an employee, SEC employee, board member, etc (I assume) so you aren't bound by any restriction. That is basically the sport we engage in: can we read tea leaves and indirectly figure out something that TM didn't mean to say or something.

    However, if your friend works there and tells you about the electric plane both you and he are insider trading, if that information leads to a trade by you, or anyone you tip. Even if the trades lose money because the plane is a terrible flop, it doesn't matter. Even if the friend doesn't trade he is insider trading.

    Someone correct me if I have it wrong. By my definition, I always assumed if you see something you weren't supposed to on a factory tour it would be fair game to trade on. Tipping everyone such data would be a violation of the NDA of the tour though.
     
  7. Robert.Boston

    Robert.Boston Model S VIN P01536

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    IANAL, and you should consult one before undertaking what you're suggesting.

    By providing you the information, the employee will have breached his or her NDA which was part of his or her employment agreement. As we've recently seen, Tesla does not tolerate internal leaks and will fire then sue this individual. I can't imagine why, therefore, anyone would risk his job to provide this information.

    Again, IANAL, but Investopedia defines it thusly:
    So if you get this information and trade on it, you could end up serving time. If any information of this sort gets posted on TMC, we pull it as quickly as possible.

    Bottom line: just don't. Please.
     
  8. davewill

    davewill Member

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    If you had to sign an NDA, wouldn't that be notice that the info from the tour is confidential and non-public?
     
  9. austinEV

    austinEV Active Member

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    Yeah, don't touch this stuff. I have an acquaintance that got hit with it. I had to come in for interviews just because I was at a social event with him at the wrong time. I had no idea if I was under suspicion and it was scary as Hell. (before someone says it, I suppose I should have lawyered up. As it happens I wasn't guilty, but there was a chance I could have said something incriminating in my ignorance.)

    - - - Updated - - -

    Well, that is my question. Putting aside the insider source, which is always illegal, what if the tarp flew off of the electric plane during a factory tour and I happened to see it? I would be bound to not TALK about it, but couldn't I legally make private trades on that, assuming I could figure out how to benefit from it (unlikely).
     
  10. drinkerofkoolaid

    drinkerofkoolaid Active Member

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    IANAL, but someone once explained it to me this way. If a person is in a coffee shop, overhears the CEO of a company say something to someone, and immediately buys shares in response to what he heard, the person who overheard the conversation has not committed any crime.

    If a person leaks information online that is not supposed to be public, the websites the information is posted on, usually have no obligation to remove the information, unless it contains information that is copyrighted.

    Likewise, anyone who reads leaked information on a forum, and initiates a trade based on that information is not guilty of a crime for the same reason the person who overhears a conversation in a coffee shop isn't guilty of a crime; the person wasn't involved in the initial conversation, and doesn't know if the information is accurate.

    Is my understanding correct?
     
  11. AB4EJ

    AB4EJ Member

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    Because there are so many people who follow every little move that Tesla makes, and trade based on these things, practically anything that a Tesla employee says (including also consultants, contractors, and employees/contractors/consultants of Tesla suppliers) can influence the stock price. Therefore it could constitute illegal insider trading if they say anything about anything that was not officially announced through Tesla's Communications Department. This is the reason for all the NDAs flying around all the time. We had similar situation at Mercedes; any question posed to an employee, (or anyone in position to know anything, really) must be referred to Communications. Therefore the company speaks with one voice and does not attract unwanted attention from SEC, Federal Trade Commission, Justice Department, etc.
     
  12. jeff_adams

    jeff_adams Member

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    I would suggest that people be careful how much they invest based on conversations with Tesla employees.

    How many times over the years have we read posts where employee information that was passed on to forum posters turned out to be incorrect or totally false?

    People have a bad tendency to hear what they want to believe instead of what is actually said. They take two separate facts and mash them together as a new fact. They aren't even conscious of doing it. Think of the children's game "telephone".

    Add to that the high level of technical complexity that is Tesla and you have a situation ripe for factual errors by uneducated employees who speak on topics that are not their expertise.
     
  13. Quant

    Quant Member

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    Really ? Is this some kind of joke? As John McEnroe would say : You cannot be serious!! I think the moderator should soon delete this thread ! Just my opinion!
     
  14. MikeL

    MikeL some guy

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    Just buy a bunch of TSLA
    Will you profit or lose. ?? Yes, You will.
    :rolleyes:
     
  15. winfield100

    winfield100 Member

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    agreed. this taints the whole series. my ethics folks require yearly disclosure of everything, so i avoid the word bio or anything similar. just the questions asked are dicey and lower the standards
     
  16. austinEV

    austinEV Active Member

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    Nonsense! At worst we educated readers about insider trading. Chilling conversation doesn't benefit anyone.
     
  17. doug

    doug Administrator / Head Moderator

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    Ummm... It should go without saying, but if you're thinking of doing something that you think might be illegal, don't do it on TMC.
     
  18. Jackl1956

    Jackl1956 Member

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    The most intelligent thing I ever heard President Obama say, was advice he gave to a young man . The young man told Barack, I would like to be a politician when I grow up. Do you have any advice for me? President Obama told him to very careful with what he put on the Internet.
     
  19. Auzie

    Auzie Tree Hugger Member

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    My risk analysis indicates the following activities might affect the odds:

    1. Advance announcement of the planned activities, to streamline the process and make sure all is ready for the big act (TMC publishing is good enough)

    EfficientDumbRobber.JPG

    2. More efficiency improvement, by making sure you are easily contactable. This requires leaving contact details for easier identification (TMC avatar will do here)

    Call Me to rob you.JPG

    3. When all is done, make sure not to fall for the free beer (the most difficult one)

    FreeBeer.JPG
     

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