Insider Information

Finance a la shmoop what is inside information?

all right well inside is here the boardroom where secrets are kept outside [Board room door opens]

is here Wall Street where secrets are well sometimes

illegally exploited inside legal fiduciary duty to keep your mouth shut

about mergers, acquisitions, how business is doing whether or not the CEO did in

fact film himself planking naked on the roof of the Mercedes dealership all of [Man planking on roof of Mercedes building]

that is kept inside that's inside information outside yeah Regulation FD

full disclosure everything that is disclosed to everyone at the same time

that's outside information or acceptable information for all.. Inside information

is knowledge you have that would let you invest with an unfair advantage over

everyone else you have to act as an investor, advisor or anyone in the wall

street dance on a fair and level dance floor otherwise if they catch you yes

you go to jail so the big fat red line that delimits what inside is versus [Pen draws a red line]

outside is well simply the question does everyone know this or could everyone

have known this had they simply looked at or did the math.....

you happen to be at Verizon having lunch with a buddy who did something bad in a [Man having lunch with friend at Verizon]

former life and now has to work in customer service there you leave to take

a whiz while you're standing there streaming broadband you see the CEO of

Verizon, you recognize him from the distinctive comb-over stand and well

you stream next to him the two of you streaming there in stereo he has the one [Man and CEO peeing at urinals]

hand on the steering wheel and the other is holding his iPhone it's volume is

turned up loudly nobody else is in the men's room there and you can hear the

voice on the other end say okay it's confirmed Goldman is committed now to

helping you raise twenty billion dollars to buy Netflix and the Verizon CEO says

I'm very excited let's get this process started tomorrow okay now you have [CEO discussing money on iPhone]

inside information you heard something you shouldn't have heard you can't short

Verizon and you can't buy Netflix now at least without landing yourself in the

slammer neither can any of the people you work with or friends or family they

are now liable because they are what is called covered parties which means that

they are covered by the same rules that you're covered by which means that

they're obligated to follow the same set of strictures and are essentially

treated as if they more or less are you well what do you do well you immediately

finish the streaming zip up wash using soap and then phone your compliance [Man washes hands and exits the restroom]

lawyer and tell her to stop trading in either stock until you can come in and

explain all the facts and details to her and her buddies there inside information

is not illegal to have it's only illegal to use as a basis to trade and make

money so fingers crossed you're good at keeping secrets [Man crosses his fingers]

at least well better than this guy