"Insider trading" doesn't have a well defined boundary. The SEC sued Mark Cuban [1] for "committing securities fraud by engaging in illegal insider trading" under similar circumstances. But he kept his mouth shut, didn't destroy evidence, and didn't lie to the FBI. Did he trade on "inside information"? Sure. But the Jury found him not guilty of insider trading.
> "Insider trading" doesn't have a well defined boundary
Correct. In our courts it’s ambiguously defined.
Colloquially, Stewart got a tip-off that arose from the non-public outcome of a drug trial. Whether she committed insider trading is open; whether she traded—knowingly or unknowingly—on material non-public information is pretty clear.
It was third-party hearsay. The stock tip came from her stock broker, who also happened to handle transactions for people with inside knowledge. The broker didn't know the details about the FDA trials, only the movement some of his clients were making.
This is why she wasn't tried on insider trading, but instead on the story she made up to cover the fact that she was given this knowledge indirectly.
> stock tip came from her stock broker, who also happened to handle transactions for people with inside knowledge. The broker didn't know the details about the FDA trials
Source? Not disputing the broker was facilitating others’ insider trades, but if they were, it takes the suspicion to a whole new level around why this broker is so comfortable with his clients with potential insider status making large bets just ahead of corporate events.
Agreed. I don't think she knowingly insider traded. After the fact, the authorities were going after her broker and she erased a voice mail message to protect the broker. They were upset that she deleted evidence and went after her because she was high profile.
> were upset that she deleted evidence and went after her because she was high profile
She also previously held securities licenses. That takes entire categories of innocent error out of the picture. I hold securities licenses. I’d be held to a higher standard because plausible deniability is removed.
[1] https://en.wikipedia.org/wiki/Mark_Cuban#SEC_insider_trading...