Shadow Trading Is Bad Sometimes – Bloomberg

But … why? Medivation was not actually harmed by Panuwat’s trading in Incyte’s stock. Perhaps, as a matter of, like, fairness, or being friendly with the SEC, companies really should have policies saying “you can’t shadow trade in our competitors’ stocks.” But perhaps as a matter of employee relations (and keeping the employees out of trouble), companies should instead have policies saying “go ahead and shadow trade in our competitors’ stocks, that is explicitly allowed by our policies, have fun.” Why would a company want to have a policy that could send its employees to jail for doing something that doesn’t hurt the company?

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Yes, in general, it is odd to have criminal law that companies get to make for themselves. But that’s how insider trading law works!

Source: Shadow Trading Is Bad Sometimes – Bloomberg