An Executive Bought a Rival’s Stock. The SEC Says That’s Insider Trading. – WSJ

Incyte’s stock was strongly correlated with Medivation’s during the year before Panuwat’s trading, according to Daniel Taylor, a professor at the University of Pennsylvania who specializes in insider-trading research. Incyte’s stock increased 8% on the day in August 2016 that Pfizer announced it would acquire Medivation, he said.

Panuwat’s case shows that “if you have information about one company, based on the historical correlation, you also have information about the other,” Taylor said. “If the SEC loses, it’s only because there is a hesitation about extending the jurisdiction of insider trading to peer companies. I don’t think they lose on the facts.”

Source: An Executive Bought a Rival’s Stock. The SEC Says That’s Insider Trading. – WSJ