It doesn't matter that the notes were first offered on 11/19 (when AMD's price was lower). What matters is the date when the terms of the converts became fixed (the so-called "pricing date.").
This price was "fixed" at 7.37 on 11/20, when the closing price was $5.58, for a 32% premium. See:
The notes carry a 4.5 percent coupon and are convertible into AMD shares at $7.37, which is 32 percent above their $5.58 Tuesday closing price. Earlier, a 4.75 percent to 5.25 percent coupon and 23 percent to 27 percent premium were expected.
Hence the SEC's policy of prohibiting any insider trading based on non-public material information is a sensible one.
This is not entirely correct. The SEC only prohibits such trading if the insider has fiduciary responsibility. Now, I am not arguing that Sanders is not a fiduciary, but trading on insider knowledge is not illegal per se. There are other elements that make it illegal.
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