S&P 500   4,532.76
DOW   35,028.65
QQQ   366.48
S&P 500   4,532.76
DOW   35,028.65
QQQ   366.48
S&P 500   4,532.76
DOW   35,028.65
QQQ   366.48
S&P 500   4,532.76
DOW   35,028.65
QQQ   366.48

U.S. Insider Trading Activity on 1/19/2022

An insider trade occurs when an individual that has non-public information about a company buys or sells shares of that company's stock. Examples of people who would be considered insiders include a company's executive officers, its board of directors, and its major shareholders. Tracking a company's insider trades is a metric that can be used to identify the direction that the company's executives believe that the company is headed. For example, if many insiders purchase more shares of a company, they may think that the company will have strong future earnings and that the share price will increase in the near future. What you need to know about insider trading.

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CompanyInsider NameBuy/SellShares Bought/SoldTotal TransactionShares Held After TransactionTransaction DateDetails
EGHT
8x8, Inc.
Dejan Deklich (Insider)Sell2,130$33,760.501/18/2022
ABSI
Absci Corp
Sean Mcclain (Insider)Buy7,155$49,512.601/19/2022
ADBE
Adobe Inc.
John E Warnock (Director)Sell4,000$2,074,920.001/19/2022
ADBE
Adobe Inc.
John E Warnock (Director)Sell4,000$2,074,920.001/19/2022
GOOG
Alphabet Inc.
Lawrence Page (Director)Sell13,889$37,915,719.991/18/2022
FOLD
Amicus Therapeutics, Inc.
John F Crowley (CEO)Sell8,564$87,609.721/18/2022
ANGI
Angi Inc.
Bowman Angela R Hicks (Director)Sell10,000$84,600.001/18/2022
APLS
Apellis Pharmaceuticals, Inc.
Alec Machiels (Director)Sell1,250$50,700.001/14/2022
ARVN
Arvinas, Inc.
Briggs Morrison (Director)Sell20,960$1,373,928.001/14/2022
AVT
Avnet, Inc.
Thomas Liguori (CFO)Sell21,625$907,601.251/18/2022
BBBY
Bed Bath & Beyond Inc.
John R Hartmann (COO)Buy6,667$100,005.001/18/2022
BILL
Bill.com Holdings, Inc.
Rene A Lacerte (CEO)Sell10,000$1,798,600.001/14/2022
BMRN
BioMarin Pharmaceutical Inc.
V Bryan Lawlis (Director)Sell4,250$372,342.501/14/2022
CAL
Caleres, Inc.
Todd E Hasty (CAO)Buy3,300$74,877.001/14/2022
CALX
Calix, Inc.
Shane Todd Marshall Eleniak (EVP)Sell25,000$1,319,250.001/18/2022
CPSR
Capstar Special Purpose Acquisition Corp.
Raju S Kucherlapati (Director)Buy15,000$100,050.001/14/2022
CDNA
CareDx, Inc
Reginald Seeto (Insider)Sell1,719$68,880.331/18/2022
CAT
Caterpillar Inc.
Joseph E Creed (Insider)Sell5,004$1,150,920.001/18/2022
CHPT
ChargePoint Holdings, Inc.
Lawrence Lee (Insider)Sell20,000$294,600.001/14/2022
NET
Cloudflare, Inc.
Katrin Suder (Director)Sell6,500$622,830.001/18/2022
NET
Cloudflare, Inc.
Paul D Underwood (CAO)Sell2,000$190,120.001/18/2022
CPSS
Consumer Portfolio Services, Inc.
Black Diamond Capital Manageme (Major Shareholder)Buy17,844$189,681.721/18/2022
DDOG
Datadog, Inc.
Amit Agarwal (Insider)Sell2,500$340,475.001/14/2022
ECPG
Encore Capital Group, Inc.
Gregory L Call (CAO)Sell4,699$315,396.881/18/2022
ENVA
Enova International, Inc.
Sean Rahilly (General Counsel)Sell1,430$62,848.501/18/2022
ES
Eversource Energy
Faasen William C Van (Insider)Sell1,859$161,454.151/18/2022
EXPE
Expedia Group, Inc.
Susan C Athey (Director)Sell300$54,597.001/18/2022
FSLR
First Solar, Inc.
R Craig Kennedy (Director)Sell600$48,816.001/18/2022
GPN
Global Payments Inc.
William I Jacobs (Director)Sell500$74,770.001/18/2022
GO
Grocery Outlet Holding Corp.
Thomas F Herman (Director)Sell2,000$51,320.001/18/2022
HLT
Hilton Worldwide Holdings Inc.
Matthew W Schuyler (Insider)Sell3,000$435,570.001/18/2022
HNI
HNI Co.
Kurt A Tjaden (SVP)Sell49,022$2,043,727.181/14/2022
HFBL
Home Federal Bancorp, Inc. of Louisiana
Walter T Colquitt III (Director)Sell1,436$29,294.401/19/2022
HUBS
HubSpot, Inc.
Brian Halligan (Insider)Sell11,520$5,159,462.401/18/2022
HBAN
Huntington Bancshares Incorporated
Julie C Tutkovics (VP)Sell3,084$54,401.761/18/2022
HBAN
Huntington Bancshares Incorporated
Jana J Litsey (General Counsel)Sell6,000$106,500.001/18/2022
IIVI
II-VI Incorporated
Christopher Koeppen (CTO)Sell500$34,905.001/18/2022
LIND
Lindblad Expeditions Holdings, Inc.
Trey Byus (Insider)Sell11,697$214,172.071/19/2022
LIND
Lindblad Expeditions Holdings, Inc.
Sven-Olof Lindblad (Director)Sell5,166$95,880.961/18/2022
LMPX
LMP Automotive Holdings, Inc.
Samer Tawfik (CEO)Sell9,000$61,740.001/18/2022
MRVL
Marvell Technology, Inc.
Matthew J Murphy (CEO)Sell30,000$2,371,800.001/18/2022
MRVL
Marvell Technology, Inc.
Jean X Hu (CFO)Sell22,277$1,780,823.381/18/2022
MAS
Masco Co.
John G Sznewajs (CFO)Sell6,837$457,053.451/18/2022
MAS
Masco Co.
Keith J Allman (CEO)Sell10,000$671,400.001/14/2022
MAS
Masco Co.
Keith J Allman (CEO)Sell21,674$1,448,906.901/18/2022
MRSN
Mersana Therapeutics, Inc.
Timothy B Lowinger (Insider)Sell4,741$28,066.721/18/2022
CASH
Meta Financial Group, Inc.
Sonja Anne Theisen (EVP)Sell1,066$66,092.001/14/2022
MU
Micron Technology, Inc.
Sanjay Mehrotra (CEO)Sell100,000$9,716,000.001/14/2022
MULN
Mullen Automotive Inc
David Michery (CEO)Sell30,000$116,400.001/18/2022
OM
Outset Medical, Inc.
John L Brottem (General Counsel)Sell10,002$356,171.221/18/2022
OC
Owens Corning
Marcio A Sandri (Insider)Sell5,459$518,605.001/14/2022
PFMT
Performant Financial Co.
Prescott Group Capital Managem (Major Shareholder)Buy175,322$361,163.321/14/2022
PFMT
Performant Financial Co.
Prescott Group Capital Managem (Major Shareholder)Buy71,136$144,406.081/18/2022
PSNL
Personalis, Inc.
John Stephen West (CEO)Sell35,484$416,227.321/18/2022
PSMT
PriceSmart, Inc.
Robert E Price (Director)Sell10,000$734,200.001/18/2022
QLYS
Qualys, Inc.
Sumedh S Thakar (CEO)Sell3,200$401,280.001/18/2022
RBLX
Roblox Co.
Craig Donato (Insider)Sell12,500$1,000,750.001/19/2022
ROKU
Roku, Inc.
Anthony J Wood (CEO)Sell80,000$13,375,200.001/18/2022
SAFE
Safehold Inc.
Istar Inc. (Major Shareholder)Buy7,223$499,181.531/18/2022
CRM
salesforce.com, inc.
Marc Benioff (CEO)Sell2,300$523,388.001/18/2022
SGEN
Seagen Inc.
David W Gryska (Director)Sell4,500$608,580.001/14/2022
S
SentinelOne Inc
Charlene T Begley (Director)Buy1,395$59,706.001/14/2022
SIBN
SI-BONE, Inc.
Jeffrey W Dunn (Director)Sell1,747$38,434.001/15/2022
SSD
Simpson Manufacturing Co., Inc.
Brian J Magstadt (CFO)Sell2,000$255,420.001/18/2022
SPT
Sprout Social, Inc.
Preto Joseph Del (CFO)Sell900$58,716.001/18/2022
SFIX
Stitch Fix, Inc.
Working Capital Advisors (Uk) (Major Shareholder)Buy150,000$2,524,500.001/14/2022
SFIX
Stitch Fix, Inc.
Working Capital Advisors (Uk) (Major Shareholder)Buy150,000$2,442,000.001/18/2022
SNX
SYNNEX Co.
Marshall Witt (CFO)Sell550$59,521.001/14/2022
TELA
TELA Bio, Inc.
Ew Healthcare Partners Fund 2, (Insider)Buy567,467$6,809,604.001/14/2022
TENB
Tenable Holdings, Inc.
Amit Yoran (CEO)Sell37,500$1,832,625.001/14/2022
TDG
TransDigm Group Incorporated
W Nicholas Howley (Director)Sell11,500$7,253,855.001/18/2022
RBOT
Vicarious Surgical Inc
Sammy Khalifa (CTO)Sell6,194$45,278.141/14/2022
RBOT
Vicarious Surgical Inc
Adam David Sachs (CEO)Sell7,743$56,523.901/14/2022
VCRA
Vocera Communications, Inc.
Howard E Janzen (Director)Sell8,000$631,840.001/18/2022
VOXX
VOXX International Co.
Beat Kahli (Director)Buy20,000$214,000.001/18/2022
WAFD
Washington Federal, Inc.
Thomas J Kelley (Director)Sell17,000$630,870.001/19/2022
W
Wayfair Inc.
Michael D Fleisher (CFO)Sell5,292$846,984.601/19/2022
W
Wayfair Inc.
Steve Oblak (Insider)Sell941$150,080.091/19/2022
WYNN
Wynn Resorts, Limited
Matt Maddox (CEO)Sell20,000$1,836,600.001/18/2022
YUM
Yum! Brands, Inc.
David W Gibbs (CEO)Sell1,433$183,595.961/14/2022
ZNTL
Zentalis Pharmaceuticals, Inc.
Cam Gallagher (Director)Sell10,000$626,400.001/18/2022
Insider Trading - What You Need to Know

We all like having inside information. But much of the time, what’s passed off as inside information, is just idle gossip. In other cases, we know that having inside information is really a way for an organization to profit from delivering what is viewed as premium content. Still, the basic idea behind inside information is that you are getting information that the general public does not have.

When it comes to investing, this practice of acting on inside information is known as insider trading. In recent years, insider trading may bring to mind a celebrity such as Martha Stewart. Going back to the 1980s, one of the most popular movies of the decade, Wall Street, is at its core a movie that highlights the dangers of insider trading.

The idea of price fixing, athletic competitions being fixed, even athletes using performance-enhancing drugs spark strong emotions and opinions in our society. That’s why it may surprise you to know that insider trading – in some cases, is perfectly legal.

This article will provide a definition of insider trading, who constitutes an insider, why inside trading is harmful, and when – and under what conditions - insider trading can be legal.

What is insider trading?

Insider trading is the action of buying or selling (“trading”) a security based on material information that is not available to the public. Although generally assumed to be illegal, there are times when insider trading can be legal. In these cases, the trades have to be properly disclosed to the SEC (more on that below).

For insider trading to be illegal, essentially three conditions have to be met:

  1. Information has to be passed along by an insider.
  2. That information has to be acted upon (traded) by the individual(s) receiving the inside information.
  3. The trading activity has to occur before the inside information becomes available to the general public.

Who is an insider?

If your friend’s girlfriend’s uncle passes along a “hot tip” that they received, your first question – that is if you thought the tip was credible at all – might be who’s your source? That is a critical distinction for insider trading. To constitute insider trading, the private or confidential information being passed along must be issued by an insider.

An insider is defined as someone who meets one of two conditions:

  1. They are an individual who has access to valuable non-pubic information about a corporation. Although this includes a company’s directors and high-level executives, it has been expanded in recent years to include virtually any employee of a company. In this case, the individual is presumed to have a fiduciary interest in the company and therefore should put the company’s interests ahead of their own.
  2. They have an ownership stake in the company’s stock that equals over 10% of that company’s equity.

However, in the case of insider trading, the definition of “insider” expands to include any individual who buys or sells shares of a security based on inside information material to that security’s price that is not public knowledge. In recent history, one of the more recognizable cases of insider trading involved Martha Stewart, who was convicted of insider trading for selling shares based on a tip that she received from a broker at Merrill Lynch (someone who met condition #1 above). And in 2018, a professional football player Mychal Kendricks was indicted for insider trading after acting upon information he received from an acquaintance who was a broker with Goldman Sachs. 

This brings up a critical point to understand insider trading. The SEC makes no distinction between the "tipper" and the "tipee". In the two instances above, neither Stewart nor Kendricks worked for the company or an investment firm. In the case of Stewart, she was an existing shareholder. In the case of Kendricks, he entered and exited trades based on the information he received. However, in both cases, they were indicted for insider trading because they acted on the information they received before the information was available to the public.

So getting back to our example, if your friend’s girlfriends uncle was the Vice President of the company that the “hot tip” is based on, you should tread very carefully before deciding to take action. However, simply being informed of the tip does not constitute an illegal activity.

Can someone be guilty of insider trading for idle conversation?

For an individual to be guilty of insider trading do they have to have intent? A Supreme Court ruling, Dirks v. SEC cites “the mere disclosure of material, nonpublic information, by itself, does not necessarily constitute a breach of an insider’s fiduciary duties.” Another case, SEC v Switzer, upheld this ruling. In that case, a former college football coach, Barry Switzer, overheard the former CEO of Texas International discussing nonpublic, material information with his wife while at a high school track meets and act upon that information. The case went to trial and the Supreme Court ruled that the CEO did not breach his fiduciary duties.

However, this is still considered a high standard to be met. For example, in the Switzer case, the CEO was talking to his wife in what he believed to be a private conversation. However, if he had been talking directly to Switzer, even if he had no reason to believe his information would be acted upon, he could have been guilty of insider trading. 

Why is insider trading harmful?

For companies, insider trading is a violation of an insider’s fiduciary duty. In their fiduciary role, they are supposed to put their client’s (in this case, their company’s) interests ahead of their own. By trading on inside information, particularly when it involves selling shares that can affect a company’s stock price; they are putting their own interests, or the interests of other, select individuals, ahead of the company.

A second reason is one that affects both retail and individual investors and that is the notion that insider trading violates the principle of transparency. In a properly functioning market, all investors have access to the same information and can make their investment decisions accordingly. The very nature of insider trading violates transparency because the intention is to give a select few investors a material advantage over the vast majority of investors. If allowed to proceed unpunished, individual investors would quickly lose confidence in the market and could easily choose not to participate in the market.

Insider trading versus inside information

The word “Insider” has become a, perhaps overused, marketing term that many companies, particularly content providers, use as a way to increase their subscriber base for paid content. The idea is that by becoming an “insider”, subscribers have access to information that non-subscribers do not. This, however, is not illegal because all consumers have the same access to the information; it’s just a question of whether or not they are willing to pay for it.

In the specific context of insider trading, the key distinction between insider trading and insider information is the idea of taking action on the information. For example, if an executive of a company knows that their company is going to buy another company and they pass that information along to family and friends that is not, by itself, insider trading. However, it becomes insider trading as soon as anyone acts upon that information to buy or sell the company’s stock in advance of that announcement becoming public information. Using the same logic, if someone who became privy to that information initiates their trade after the information goes public, they are not guilty of insider trading. So the key difference between insider trading and inside information is the word “trading”.

When is insider trading legal?

There are times when insider trading is legal. Insiders (as defined above) can, and frequently do, trade stock in their own company. These trades, however, are highly restricted and must meet certain conditions. The insiders conducting the trade must report the trade to the SEC within two business days of when the trade occurred. So if an insider sells 5,000 shares on a Monday, assuming there is no Holiday in between, they would have to report this sale by Wednesday. If the trade is done on a Friday, they would have to report it by the following Tuesday. The SEC has a specific form, called Form 4, that will detail the trade and make it public record. The insider must also file a Form 14a, that lists all of the company’s directors and officers along with any share interest they may have.

Obviously, knowledge of whether a company was buying or selling a large number of shares would be valuable to an individual investor. This is particularly true in the case that shares of a company are being purchased. SEC rules prevent insiders from trading company stock within any six-month period, so if an insider is buying their company’s stock an individual investor can reasonably surmise that the company’s growth prospects are good.

Information on insider trading activity is available on many financial websites; however, in some cases, the filings do not appear right away. For the most current information, investors can go to the SEC’s EDGAR (Electronic Data Gathering, Analysis, and Retrieval) database. You will first have to search the database for a company’s CIK number, and then you can find any individual filings related to that company.

How is legal and illegal insider trading different?

The key distinction between insider trading is legal and illegal is one of intent. In the case of legal insider trading, a company is tipping the public to their actions by way of an SEC filing that is available for public scrutiny. Since a company may have many insiders, sometimes numbering in the hundreds, the insider information may paint a contradictory picture. In this case, individual investors will still have to rely on fundamental analysis or technical analysis to discern price movement.

In the case of illegal insider trading, the intent is to act on inside information before the public has knowledge of it. In this way, a select few “insiders” can profit from the information.

The bottom line on insider trading

Is it illegal or just idle gossip? Is the information from a credible source with access to private company information, or is it simply speculation based on publicly available information? These are two questions that are at the heart of insider trading. The practice of allowing a select few groups of investors to profit by letting them buy or sell a stock or security based on material information that is not available to the general public is, and always be considered, illegal in the eyes of the Securities & Exchange Commission. For this reason, many companies make even the lowest level employees sign non-disclosure agreements that can lead to termination, or at least censure if they knowingly pass along material information about the company to outside sources.

Insider trading requires access to material information that is traded upon before that information is available to the public. To be guilty of insider trading, such as the case of Martha Stewart, an individual does not have to be an employee of the company or an investment firm with access to the knowledge (i.e. the tipper). Even the person who receives the tip can be indicted and convicted if they took action that allowed them to profit from the information. However, just being presented with information does not make an individual guilty of insider trading.

Although generally assumed to be illegal in all cases, insider trading has been around for decades, and in some cases is entirely legal. If properly disclosed, knowledge of insider trading activity can be a tremendous benefit to institutional and retail investors. In fact, some analysts and investment brokers use insider trading information to supplement their fundamental analysis or technical analysis of a company.

 

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