
Ask HN: I found documents on the backseat of a taxi. Can I legally use them? - stefek99
I have found some printouts. Assuming they relate to some company on the stock market how can I ensure I do not pollute my Intellectual Property &#x2F; avoid sentencing for insider trading or use of unauthorized information?<p>General question - what makes confidential confidential?<p>Is it enough to write it on sheet of paper? And how about other pages that don&#x27;t have this clause?<p>General, open-ended question... Thanks.
======
kefka
I'll answer your question with a situation I had happen to me recently.

Two of us were working at the local hackerspace late night. We had some trash
we took out to the dumpster, and we saw a desktop tower. It had a bit of dried
mud on it, so it was probably there no more than a few hours.

I take it in, and I put it in the 'dedicated desktop testing area' (read:
wherever there was a keyboard/mouse/monitor). I was expecting some massive
dead machine. Nope. there was a 80GB hard drive, cd/dvd, RAM, CPU.. Everything
was there, and it boot right into WinXP.

Then the ohshit factor came into play. On the desktop there were icons for
"Anthem Insurance Quoter", "Blue Cross Quotes".... and Client List.xls.pdf .
That list alone had 500 names, SSN, DOB, address, and phone numbers. And there
even more files with more identities as well. So, what do I do? Oh, and I also
found the agent's name along with his license number. Nifty. He googles to
about 2.5 miles away.

So.. is this a discarded machine, or was this a drop site after a theft? I
don't know, and powering it up didn't tell me. There wasn't any security on
the machine at all, so anybody could have plugged in a USB storage and copied
without fear of logs.

I took it to the police. That's not because of the hardware, but because they
can alert the users on this machine of possible identity theft and take
appropriate steps.

(Yes, I do know where on Tor to sell identities like this. And the quality of
these would have been roughly 100$/per. And I'm poor, but damned if I'll be
unethical like that.)

------
Theodores
Why legally?

A couple of days ago I found a wallet with what looked like £40 (Didn't count
it), travelcard and bank cards in it. I could have taken the money and put it
the rest in the bin.

I could have even skimmed the credit/debit cards and gone on a spending spree!

But I did not.

I went to the local shop and enquired - 'do you know this guy?' The wallet
owner actually lived in the flats above the shop and the wallet was returned.

To the owner of the wallet this was an unexpected turn up for the books - his
faith in human nature restored etc. - fine, but not a tangible benefit to me
(unless there is a god).

However, there actually is a tangible benefit, one that I did not think of
when I enquired in the shop. The owner of the shop now knows that I will do
the right thing for a complete stranger that happens to have lost a wallet.
Hence, if I lose my wallet and cannot afford so much as a pint of milk, I can
expect a favour from him, i.e. some necessities on credit until I can sort out
my wallet.

All I am saying is that there may be benefits to returning the documents,
benefits that you have not thought of.

~~~
manojlds
Does using the information on the document mean whoever misplaced is going to
lose something? Probably not. My point is, the OP's case and your example
about the wallet are not the same.

PS: if I were the OP I would try to return or destroy them.

~~~
Theodores
...however, my point is that you don't actually know what the benefits are of
doing the right thing, except that it is highly likely that there will be
benefits, even if small ones.

Conversely, doing the wrong thing probably means that the 'unintended
consequences' are bad - getting caught etc.

You could take the documents and through thinking of 'I have struck gold' and
nothing else, walk out of the cab and into the on-coming bus, to go under it
and be rescued by the paramedics.

However, what I think you are getting at has been discussed regarding music.

Imagine finding a USB stick, making a perfect copy of it. When you get home
you find that it contains the latest and as yet unreleased album by your
favourite artist. Being good you don't post it onto youtube or even let your
mates have a copy. However, even then the record label would deem you a
pirate, if they found out. But we have had that argument.

Or...

The financial scenario: you find documents that Google are to make a cash bid
for Facebook next week. You sell your mother and buy lots of shares in
Facebook. The bid happens and you get to sell your shares, buy your mother
back and make a tidy profit. Seems simple, victimless crime!

However, the documents could have been planted there (and elsewhere) by
someone in the city with lots of shares to sell and wanting to 'secretly tip'
the market so they profit. In this case you lose out on your investment and
cannot buy your mother back.

Or Sergei and Brin find they have lost their documents in the back of the cab,
see it as an omen, and don't go ahead with the bid.

However, if you did try and return the documents and were successfully able to
do so, they might give you a T-shirt and a pat on the back for being good.
They might even give you a job.

Here is a joyful parable:

The Parable of the Flowers

Believing in God is to believe in God's presence and uniqueness. This belief
saves the person from meaninglessness and from being errant. Assuming that
lies would make a person happy is to go after a dream that will never come
true. Reality is God's consent.

In old times, there was a sagacious emperor, and his people loved him. But the
emperor was enduring an absence; he did not have a son or a daughter. After a
while, the emperor decided to adopt a child.

Public criers shouted, "Listen to me people! On Friday our emperor will adopt
a child. This child must be a ten year-old boy; our emperor will leave his
throne to his foster son, and he will rest. The people who want to give their
sons to the emperor should gather in front of the palace on Friday."

Before the crier finished talking, the public square in front of the palace
became full of ten year-old boys.

The emperor gave flower seeds to each boy, and declared his condition: "After
sowing these seeds and growing them, you should bring me a bunch of flowers.
Of whose flowers that I become fond of, that boy will become my adopted son.
You have three months; after this period it is our decision to gather in this
same place."

Three months passed. The emperor went to the square and saw that the square
was full of beautiful flowers with different colors. The boys who had taken
the seeds were waiting for the happy moment.

The emperor looked attentively at the boys while passing near them without
stopping.

At another corner stood a boy crying who had no flowers in his hands. The
emperor went near the boy, and stopped. He asks:

"Why are you crying?"

The boy spoke of his trouble:

"My emperor, the seeds that your Excellency has given me did not grow despite
my efforts. I tried everything, but in vain. I am weeping because you will not
adopt me since I do not have any flowers."

The emperor replied, "Do not cry because of that, because I will adopt you as
my son. Your seeds did not become flowers because I boiled them before giving
them to you. These people who have brought flowers think that they can deceive
me. Their flowers are not from my seeds. They found them somewhere else" said
the emperor and hugged the boy.

"You told me the truth; you did not lie to me. Listen carefully, it is the
person who accepts the truth, not the liar, who will become happy in the end."

~~~
dllthomas
> You could take the documents and through thinking of 'I have struck gold'
> and nothing else, walk out of the cab and into the on-coming bus, to go
> under it and be rescued by the paramedics.

I'm sympathetic to your conclusion, but this seems spurious reasoning. Why is
it more likely that you'd be hit by a bus thinking about how you're going to
take advantage of the information than hit by a bus thinking about how you're
going to get the documents back to the person?

Unbalanced positive ramifications are most likely to be social.

~~~
Theodores
I see your point and it is a good one!

Most people that step out into the road in front of me on my commute are doing
the 'ipod shuffle', distracted by text or talking about what they are going to
have for dinner. So it isn't as if they are distracted by anything really
significant and in some way that is where the danger is - an assumption they
can multi-task whilst crossing the road. If they were interrupted by someone
calling to say they had won the lottery etc. then they probably would stop in
their tracks and not attempt to cross the road there and then.

When I found the wallet the other day I did think whether anyone had seen me
and I did think about whether there was CCTV and whether I could get caught
had I just taken the money. However I quickly decided that I was going to try
and return the wallet. I made a few paces up the road before turning back and
going to the corner shop to see if they recognised the guy in the travelcard
photo. I was distracted, no question about it, and, had I needed to have
crossed a road then I might not have had my wits about me.

So, what would have happened had I decided to take the money? Rather than
think about whether I had been seen I would have had to actually check every
bit of street furniture for CCTV and every window overlooking me. I would have
had to surreptitiously put the wallet in a pocket and gone through the thought
process of where I was to dispose of it etc. Maybe, as a result, I would have
been extra careful on the road.

However, I believe that cheating/stealing/doing wrong poses an abnormal and
detrimental strain to thinking. By analogy, one of my Scrabble playing friends
has this habit of cheating. He is a journalist with a considerable vocabulary,
with pride to match. Therefore he has to win. However, the rest of us know
that he sometimes does things with the letters bag and sometimes we choose to
turn a blind eye. The added strain of cheating and not getting caught affects
his game meaning that he puts himself at a competitive disadvantage. He can
have a rack full of 'Q's and 'Z's and miss a seven letter triple word score
word like 'quizzed' because he is more focused on trying to get a 'U' from the
bag when there is a perfectly good one on the board already.

To conclude, it is the element of deceit.

~~~
Dylan16807
>To conclude, it is the element of deceit.

And that's what makes this tricky, because stock market situations are so
unlike ordinary life. Is there deceit?

The OP has the option of returning the papers as soon as possible, and
informing the people he returns them to about his stock market plans. He could
in fact tell everyone he meets about his stock market plans and still be
capable of a tidy profit.

There's something uncomfortable about the situation, but it's really hard to
pin down what it is, and I don't think there's any dishonesty involved.

------
jacques_chester
See a lawyer.

Seriously. See a lawyer.

People on the internet are not lawyers; if they _are_ lawyers, their main
advice is _go see a lawyer_.

Law is a profession of tiny details with huge consequences. Those tiny details
vary from place to place and from subject to subject. Even _lawyers_ have
lawyers.

If I learnt one and only one important lesson from my time in law school, it's
this: _If you have a question of law, go see a lawyer._

I mean it.

~~~
srgseg
If our only understanding of the law came directly from consulting a lawyer,
we'd all be very poor and very ignorant.

There is nothing wrong with asking about the experiences of others who may
have asked lawyers similar questions, as long as we understand that we should
directly seek a lawyer's advice in proportion to what is at stake.

By sharing our legal experiences, we'd all become better at understanding the
specific questions we should ask a lawyer, should the need arise.

~~~
jacques_chester
I disagree.

As I said, law varies by place and subject. _Those differences matter_. Some
subjects are generally consistent across jurisdictions. Some are not.

Who knows which is which? The professionals.

Who has the knowledge and experience to correctly interpret different
experiences in different circumstances? The professionals.

Intelligent people frequently form entirely inaccurate views of subjects in
which they are not experts. We mock TV shows for having VB GUIs that track IP
addresses. Lawyers feel a bit like this when non-lawyers begin swapping legal
advice.

> _By sharing our legal experiences, we 'd all become better at understanding
> the specific questions we should ask a lawyer, should the need arise._

Lawyers are not unapproachable gods. They are service professionals like any
other. You ring, make an appointment, and talk to them. It's really very
simple. They will ask some questions and take some notes. If it's a simple
matter they will give a simple answer. If it's more complicated they will ask
to get back to you.

Self-help and Stack Overflow is fine for writing most low-risk software, where
bugs can be patched. It is a risky strategy with law. Some actions cannot be
undone. You can't just revert to the "before I made that legal blunder"
branch.

~~~
srgseg
It is important that we all have a broad understanding of what is legal, what
is not, and where we need to seek advice and proceed with caution. We can then
supplement that knowledge with specific legal advice from a lawyer when
appropriate.

We cannot possibly achieve a broad understanding of the law if the only
knowledge we have about how the law works comes directly from our own personal
conversations with a lawyer.

I'm thinking of purchasing a 50 euro piece of software from a company in
Germany. Do I need to obtain customs authorization to purchase software from
countries other than the US? Perhaps I need a permit to run German software?
Maybe it's against the law to even visit a site in Germany unless I'm an EU
citizen? Perhaps I need to start paying some of my income and corporation
taxes to Germany if my business uses any German software?

If we are completely clueless about what is legal and what is not, the costs
of running all of these questions past a lawyer would bring the economy to a
halt.

~~~
jacques_chester
Now you're just beating up a strawman version of my advice.

As I noted elsewhere, most legal relationships, transactions, events and
conditions exist without ever being noticed or cared about. That is as it
should be.

But in cases of high risk or uncertainty, go see a lawyer.

~~~
dboat
I think I understand where you're coming from, but think you're going too far.
When you see people asking for legal advice and getting well intended
information that is somewhere between useless and dangerous, it seems natural
to warn people against doing that. However, there is a healthy space for
discussion between the extremes of only discussing the law with lawyers, and
credulously believing everything commenters tell you.

The OP would be insane to act solely based on the comments he reads here, but
there is value for everyone in having the discussion, even if people give bad
advice and then other people set the matter right. All the better if the OP
comes back and tells us later how it all worked out. I just sounds to me like
you're trying to shut down an interesting discussion. I say "go ask a lawyer,
but still go ahead and ask us too!"

------
asveikau
I think you have this thing backwards. Personally if I found something in a
cab my first reaction would be "that sucks, I bet someone is really frustrated
about this. I would hate that to happen to me."

Your immediate reaction seems to be "how can I turn this into money without
legal consequences?" Did you ever consider just doing nothing? Trying to
return them?

------
edw519
"Legal" does not necessarily = "Right".

So forget about what's legal and just do what's right.

You are in a unique time and place in history (as evidenced by your presence
here) to build something out of nothing and provide great value to others. So
why don't you just forget about what you found and instead spend your precious
energy building something?

As for the documents, either return them or destroy them and please move on.
For everyone's sake.

~~~
smalter
it's not obvious that trading on material, non-public information that you
overheard is unethical. it's basically the same thing as winning the lottery,
and i wouldn't not cash in lottery winnings because i have the opportunity to
build something of great value to others (that's neither here nor there).

it's not even obvious that insider trading should be illegal
([http://business.time.com/2013/07/26/why-is-insider-
trading-e...](http://business.time.com/2013/07/26/why-is-insider-trading-even-
illegal/)). (not particularly relevant, but i do think certain types of
insider trading should definitely be illegal but the scope is debatable.)

------
pseingatl
1\. The texts are subject to copyright. You have to treat them as you would
any other copyrighted text. 2\. You can trade on the information in the
capital markets. The information was disclosed to you inadvertently. You are
not an insider, you did not conspire with anyone to to violate the law. 3\.
The physical papers still belong to the owner. You may have custody of them,
but you do not own them. With respect to trading, this is no different than
walking down the street and hearing someone say that "Company X is a good
buy." 4\. You have a duty to return the documents, but you have no duty not to
read them. In fact, you have to read them in order to be able to return them.

~~~
chris_wot
_You can trade on the information in the capital markets. The information was
disclosed to you inadvertently. You are not an insider, you did not conspire
with anyone to to violate the law._

Wrong, wrong, wrong! In _SEC vs. Texas Gulf Sulfur Co._ , those who had access
to information not available to the general public and who used it to their
advantage were seen to be insiders. [1]

In _United States vs Carpenter_ , the judge stated that "It is well
established, as a general proposition, that a person who acquires special
knowledge or information by virtue of a confidential or fiduciary relationship
with another is not free to exploit that knowledge or information for his own
personal benefit but must account to his principal for any profits derived
therefrom." [2]

1\.
[http://www.casebriefs.com/blog/law/corporations/corporations...](http://www.casebriefs.com/blog/law/corporations/corporations-
keyed-to-klein/the-duties-of-officers-directors-and-other-insiders/securities-
and-exchange-commission-v-texas-gulf-sulphur-co/2/)

2\.
[http://en.wikipedia.org/wiki/Insider_trading#Court_decisions](http://en.wikipedia.org/wiki/Insider_trading#Court_decisions)

~~~
smalter
it appears to me that you're misunderstanding those cases.

in texas gulf sulfur, the defendants were officers at the company. they were
directors at texas gulf sulfur and they were trading on texas gulf sulfur
stock. they have a fiduciary duty to the company that a stranger doesn't have.

that's what the judge in carpenter is referring to. if you acquire the info by
virtual of a fiduciary relationship, you aren't free to trade on that info. in
texas gulf sulfur, they had the fiduciary relationship to the company because
they were officers at that company. not so here.

------
dmourati
Documents left on a taxi seat can be characterized as mislaid. That is, the
paper was intentionally put on the seat and forgotten.

[http://ir.lawnet.fordham.edu/cgi/viewcontent.cgi?article=117...](http://ir.lawnet.fordham.edu/cgi/viewcontent.cgi?article=1179&context=flr)

Confidentiality is a an agreement between parties not to disclose information
to a third party.

You are now talking about the unintended disclosure of confidential
information.

Since you are not a party to the confidentiality agreement, it is impossible
to enforce against you.

As far as insider trader, I don't suspect a random person who stumbled upon
such data lawfully could be found guilty of any crime for using it.

Moving from an absolutely legal treatment of the problem to an ethical/moral
one. What you want to happen if you were the owner of those documents?

Something to consider.

~~~
ramchip
> As far as insider trader, I don't suspect a random person who stumbled upon
> such data lawfully could be found guilty of any crime for using it.

That sounds like terrible advice to me. See this for example:
[http://www.investopedia.com/articles/03/100803.asp](http://www.investopedia.com/articles/03/100803.asp)

> Oftentimes, people accused of the crime claim that they just overheard
> someone talking. Take for example a neighbor who overhears a conversation
> between a CEO and her husband regarding confidential corporate information.
> If the neighbor then goes ahead and makes a trade based on what was
> overheard, he or she would be violating the law even though the information
> was just "innocently" overheard: the neighbor becomes an insider with a
> fiduciary duty and obligation to confidentiality the moment he or she comes
> to possess the nonpublic material information. Since, however, the CEO and
> her husband did not try to profit from their insider knowledge, they are not
> necessarily liable of insider trading. In their carelessness, they may,
> however, be in breach of their confidentiality.

~~~
dmourati
I don't think you read that article closely enough, nor my comment for that
matter.

Consider this, how would the fact that you took a random ride in the same cab
as the "tipper" ever be established? In other words, what would be the basis
of the insider information allegation? How would they ever know?

~~~
thyrsus
If it were worth the trouble: cell phone location records, taxi credit card
transaction records, or taxi dispatcher records.

~~~
dmourati
Let's say OP discovered a sure-fire way to make money with his located
documents and the info they contain. He puts together all the money he can,
puts it all into play, and wins huge. What starts the SEC or anyone for that
matter into looking at him as an insider? When they do start looking, what
ties him to the the taxi at all?

------
smalter
you should see a lawyer.

but the black letter law as of when i was a lawyer (2010) is that you can
trade on an overheard conversation (see the switzer case involving the famed
oklahoma football coach).

you don't have a fiduciary duty to the company and you don't inherit the duty
from the tipper because the tipper tipped without personal benefit.

edit a reliable reference (contra some of the other sources cited in this
thread):
[http://www.concurringopinions.com/archives/2009/08/insider-t...](http://www.concurringopinions.com/archives/2009/08/insider-
trading-dear-guy-speaking-behind-me-in-the-loud-voice.html)

------
smoyer
If no one knows you have the documents, you can probably trade on confidential
information, compete with the company, file a patent before them etc, and I
think you stand very little chance of getting caught. I'd recommend reading
them and burning them so there is no chance you can be connected to them.

But here's the thing ... if you do something you believe is wrong, illegal or
immoral, you'll still have to live with yourself. Being human, having empathy
(what if you'd lost your confidential papers), being sympathetic and generally
operating within the folkways and mores of society serves a purpose. People
who can operate without any of these qualities are classified as sociopaths.

So my recommendation isn't to talk to a lawyer, or take any actions related to
the papers. Burn them (preferably without reading them) and keep your inward
smile. Living with yourself is more enjoyable if you actually like yourself
(and find yourself likeable).

EDIT: Posted this at the same time as kefka ... read his response for a real
life application of what I've written. And nice to meet you kefka!

------
ChuckMcM
There are three answers here;

1) You identify the source of the documents (not necessarily who they refer to
but who created them) and you return them.

2) You turn them into a nearby law enforcement office and get a receipt.

3) You destroy them and forgot you ever saw them.

#1 it is important to know the source, if you go by the company in the
printouts and the source was an SEC auditor who was looking into the company,
then returning them to the company being audited would screw up the SEC audit.
In #2 it is important to get a receipt because if the documents are part of a
larger problem going on you will want to be able to prove you held them for a
very short time as you transferred them to the police. Anything else and
whether or not you did anything with them you will be part of the
investigation. And #3, they were lost in the first place, someone knows they
are lost and are dealing with that. That just finishes a path they were
already on. [1]

Under no circumstances do you try to profit from the discovery as that will
make you a criminal in the eyes of the law. That stuff always turns out badly.

[1] Note my wife suggested that you might give them to the Taxi driver to take
back to their lost and found so if the owner called in looking for them they
would have them handy.

------
wtvanhest
Jacques_chester is correct, but I'll provide an additional warning. If you use
the information to buy or sell stocks, and it is confidential and material
that is very liky to be a violation of insider trading.

If I were you, I would consider handing back to their investor relations and
try to build a new contact. It may work, it may not.

------
ck2
I have just found your netbook on the backseat of a taxi with it already
logged into your bank account.

So that makes it okay to transfer your life savings to my account, right?

~~~
steholmes
Not the same situation at all.

~~~
kefka
No, his netbook+bank account situation does indeed show similarities to the
main question.

If you read between the lines, it amounts to "What is the minimum legal
standard I have to follow to make money on this questionably gotten X?"

That's a sad question to have to ask.

~~~
Dylan16807
The blame for the sad situation goes to stock markets and stock market
regulations in the first place. They make it illegal to _know things about
companies_.

------
harshaw
Somewhat related but tangential:

What would happen if we had a "double blind" system where people could receive
insider trading information based on karma points? The idea is that a system
would anonymously give out insider trading information to one or more people
with the highest amount of karma. The granter of the stock tip would get a
corresponding boost (or drop) in karma based on the value of the knowledge but
couldn't benefit from the insider information directly with the exception in
the future they would have a greater likely hood of getting anonymous insider
information based on their karma point count.

example: 1) Alice creates an anomymous tip that Apple stock is likely to drop
due to an unexpected sales decrease of the iphone 6. 2) The system establishes
an initial weight for the stock tip based on company valuation and reliability
of Alice. 3) The system identifies a user or set of users with the highest
current karma points. Bob is one of these users. Bob's karma point total is
reduced by the value of the recommendation. 4) Later on after banking a large
number of points Alice is given a tip that Tesla stock is expected to rise.
Alice is able to profit on this insider knowledge without... really having
insider knowledge

This is somewhat akin to profiting off of documents in the back seat of a
taxi. Since this seems like somewhat of an obvious system I wonder if it is
practiced in real life and what law enforcement does to counter it....

------
kkjain
[ (Ur on HN => ur top 1% of world on # of v v important metrics and
intellectual gifts) \+ (Ur asking advice => u have instincts and ability) ] =>
high oppty cost of ur time.

My_Op => prob huge neg val even thinking about this.

Long Term: moral reasons aside, its simply highly unlikely to net add personal
value.

Short Term: payoff is blindingly quantifiable, but lots of hidden costs easy
to overlook => not a good likely outcome situation.

Ex 1: "not wasting energy with lawyers" is a luxury, both massively positive
value and systematically + tragically under-valued by general people

------
yason
Don't ask around these questions because _nobody knows you have them_.

If only you get rid of the printouts you're safe because nobody can prove
anything so basically you're free to do what you _feel is right_. After the
printouts are gone and you do happen to remember what they said, there's
absolutely no way to connect that _information_ to you.

The owner of the papers might want them back though, so consider that too,
please. You can return them in an anonymous envelope if you want your identity
to not be disclosed.

------
anywherenotes
Question about returning documents: OP stated these are printouts, so what is
the point of returning them if the original owner can just print them out
again? Wouldn't returning the documents actually put that person in trouble,
because their superior will know this information was misplaced - or is it the
point to notify superiors?

------
chris_wot
If the information is not available to the general public and you use it, then
that's insider trading. Don't use the documents to trade.

If the documents were misplaced, and you take them, then that's theft. Hand
them in to the police. Don't use them.

------
reginaldjcooper
What is wrong with you? Ask a lawyer.

------
popegaryt
it is not only a legal question. More importantly it is a question of ethics.
Additionally I do not hear anything regarding whether you attempted to return
the documents to the company no doubt named within said docs. My
recommendation is to return to owner

------
james1071
The answer is not to get caught.

------
bsullivan01
First thing I would have done, NOT F*CKING POST on HN. The person that lost it
reads too and so do his friends.

Second, if you wanted to you might used part of it you would have to be very
careful and pair it with something totally yours.

Oh, and laws vary from country to country. Ethics are a different thing

~~~
lostlogin
Ah, this is very close to >don't be a dick<. Why is it so hard to get people
to follow this rule?

