Insider trading has been going on ever since the stock market existed. Everyone is looking for an edge and no one is willing to play fair. Martha Stewart did it and was treated to several months in one of our nation’s fine institutions. Raj Rajaratnam did it and was sentenced to 11 years in prison and penalties of over $150 million. Heck, someone you know has probably done it.
Some are brazen about it, others are a little more secretive. I first realized how prevalent it was when I read Trading with the Enemy, an anecdotal book written by Nicholas Maier as he worked at Jim Cramer’s hedge fund. The story that struck me most was how they’d get news stories before they hit print and used it to their advantage. It’s not necessarily insider knowledge about a company but getting it a few minutes before the rest of the world, even if it was a third party, is a big advantage.
So, as for insider trading, if you want to learn how to do it, this is what you need to do to get away with it.
(Click to continue reading…)