TheGlobe.com Inc (TGLO)

[fredean]

Wrong. Anyone on the board of directors using a HF to buy TGLO shares because of information not yet disclosed to the public is illegal insider trading, regardless of plans to sell the stock or not.

In August 2000, the Securities and Exchange Commission (SEC) adopted new rules regarding insider trading (made effective in October of the same year). Under Rule 10b5-1, the SEC defines insider trading as any securities transaction made when the person behind the trade is aware of nonpublic material information, and is hence violating his or her duty to maintain confidentiality of such knowledge.

Information is defined as being material if its release could affect the company's stock price. The following are examples of material information: the announcement that the company will receive a tender offer, the declaration of a merger, a positive earnings announcement, the release of the company's discovery such as a new drug, an upcoming dividend announcement, an unreleased buy recommendation by an analyst and finally, an imminent exclusive in a financial news column.



Read more: Defining Illegal Insider Trading https://www.investopedia.com/articles/03/100803.asp#ixzz55v7N0C5f