Not insider trading from SEC. You can absolutely use material non-public information your own company collects. The entire short selling industry is based on this.
It might be a violation of your company’s policy, but unless your company has been given explicit access to material non-public info of nvidia (e.g. you work for their accounting firm), there is no SEC risk here.
NEVER assume that information learned because of your job is shielded from insider trading, even for a completely different company. From ten years ago, here are two data analysts from Capital One who thought they could use the data from credit card transactions to jump the gun on quarterly earnings reports for retail stores. Never traded Capital One stock. Didn't matter - SEC hammered them.
I usually side with the SEC, but this is so devoid of information in a way.
Should the SEC come after someone then, if they stood outside major retail outlets across a city, surveyed buyers, and made profitable buying schemes that way?
How about analyzing satellite images of warehouse shipments? (which is a thing that is being done today)
Not everyone has access to either of those things, yet as far as I am aware, the SEC does not consider that illegal.
Why would aggregating credit card transactions be any different, honestly? Capital One already uses that information to direct its own business, much the same way.
I wish this SEC would have made it clear why this was a problem.
The only leg the SEC had to stand on in this complaint is a very specific clause from the employee agreement that says not to use this information for trading.
No, it has to be explicitly outlined in the employee agreement if you’re not allowed to share some of the information. “Duty of confidentiality” is not a magic thing that just exists.
All of the cases where people have been busted (e.g. the capital one credit card transactions) are because the SEC has an exact quote from the employee agreement that says something like “don’t use this mega database to do trading”.
If your employee agreement doesn’t have something explicitly barring you from noticing racks of incoming inventory and using that information, then it’s not insider trading.
You are wrong. The duty of trust doesn't even require a formal contract, girlfriend/boyfriend qualifies for example. Also see point 4 from https://www.bloomberg.com/opinion/articles/2022-01-26/watch-... for example where there is no discussion of explicit duty of confidentiality; it is presumed in an employment relationship.
"My company bought their product" does not sound like material non-public information. It certainly doesn't sound material (and for this reason I also think it was sheer dumb luck that the investment paid off so handsomely, rather than intimate knowledge of the business).
It's absolutely treated as insider info by policy where I work. It might not rise to SEC enforcement action, but if caught you probably won't have a job anymore...
Why would your employer care what you invested in? How would they be impacted if you bought or sold public stock of someone they interact with? Would they care if you traded Google, Apple, Microsoft or Oracle?
One possible explanation is that we require this of our vendors and suppliers, and the easiest way to achieve that is by making it reciprocal.
The actual policy wording:
> No Third-Party Trading or Tipping. Do not trade in the securities of another company when aware of material nonpublic information about that company in connection with your work at ******. This includes trading in the stock of ****** suppliers, manufacturers, vendors, or customers, such as cellular network carriers or other channel partners. You must also not tip material nonpublic information about another company.
