- Aug 29, 2020
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The exact sequence was the day before his press conference he liquidated all his non-company stock to cash. He held the press conference, which placed the knowledge that he was the incoming CEO into the public domain. After his press conference and the market reacted to the information, he purchased additional stock in the company.I'm not sure. It's not obvious insider trading like if he'd acted on information that isn't available to the public, but I think that a company director doing something to tank the stock then buying a large amount of it is at least a grey area that would attract scrutiny. I'm not an expert, though.
Insider trading is mostly about acting on information before it becomes public. For example, had he sold the company stock short. (Borrowed stock on the open market to sell at the then current price) Then held his press conference. Let the stock fall and covered his short position at the lower price, and pocketed the profit. The short sale would have been considered insider trading, because he sold short based on the insider knowledge about when the announcement would be made. While it was speculation that his press conference would drop the price, the timing of the announcement that he was the next CEO, at the time of the short sale would not have been public knowledge.
The key here is that, when he made the trade, the outside investor had the same information as those inside the company. It was public knowledge that he was the new CEO, before he made the purchase. That is not insider trading. Now that he is an officer of the company, there are many additional restrictions on his personal trading, but in this instance his trade was clean.