Insider Trading......how is it determined

[statsman]

When Enron in the US collapsed a few years ago, the same thing was true.
The execs knew the company was in trouble and sold their shares while they were still worth somthing.
The average joe just had to take the loss.
In the Enron situation, the "independant" auditors were also in on the scam.

I remember the good old days when an auditor's signature on a financial report actually meant somthing.

 

[Rabbie]

Here is an interesting scenario I just conjured up.

An assembly worker for a small, yet publically traded company (let's say a paint factory) is at his station working his normal duties.
Suddenly, a fire breaks out and the worker comes to the conclusion that the ONLY factory this company operates is about to be completely destroyed along with all of the inventory (paint factories are very volatile).
The Chief Executive Officer is watching from his corner office window and sees the fire and comes to the same conclusion.
Both the assembly worker and the CEO quickly pick up the phone and call their broker and issue orders to sell all shares.

Did either of them Inside Trade???

What about the shareholder who happened to be driving past at the time of the fire?