Are you an insider?

Think you would recognize an insider tip if you heard one? It's not always so black and white, as former SEC prosecutor Robert Heim of Meyers & Heim shows in the following scenarios. Test your knowledge on what makes the sharing of certain information illegal.

By Nin-Hai Tseng, writer-reporter
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7. Joseph and Brian work as train repairmen for a publicly traded railroad. One morning they noticed the president of the company was giving a tour of the rail yard to five men and women in business suits. Later that same day their boss asked Joseph and Brian to count all the rail cars in the yard and prepare a report with the count. Joseph and Brian assume the railroad is in play and preparing for a sale.

May Joseph and Brian purchase shares of their company?
Wrong!

No.

The SEC has sued people for insider trading on similar facts on the theory that the information learned by the rail workers rose to the level of being material.

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