Am I in trouble

[MrOmnos]

My friend is a doctor. He met me today for a beer and we started talking about our work. In between conversations about his wife and the girl sitting next table he mentions to me about a high profile patient he had to attend today. Turns out his patient was a top CEO of a top company. He had a stroke and is on life support and will not last long. So, now I go on, sell my house, sell my car, sell my wife and buy as many shares of that company I can afford. Is this illegal? Will I get sued if someone finds out?

[rs20]

Why would the death of a CEO cause an increase in stock price? That seems counter-intuitive to me.

Anyway, what you describe qualifies as insider trading, and as such would most likely be illegal, depending on what country you're in. Whether you'd get caught is a whole other question, but if you're ever asking the question "would I get caught", you're thinking about something illegal and immoral.

[^_^]

How much is the wife?

[japasetelagoas]

How much is the wife?

LOL

[MrOmnos]

How much is the wife?

free if you agree to take the 7 kids with you.

[EEVblog]

Anyway, what you describe qualifies as insider trading, and as such would most likely be illegal, depending on what country you're in.

I don't think so.
The OP does not work for the company, does not know anyone who works for the company, and simply overheard some personal gossip from someone who also does not work for the company and is not (presumably) invested in the company either.
About as non insider trading like as you can get I suspect.

[CM800]

First of all, is the company actually stock trading?

secondly, will the stock actually go up on passing? It could go either way... if the company was doing well under him, likely downwards.

You might not be breaking any laws... but the doctor? If found out he told you something like that, and the company name... well he could loose his license, possibly his job, even a fine / jail time dependant on what confidentiallity agreements he has.

[IanB]

Turns out his patient was a top CEO of a top company. He had a stroke and is on life support and will not last long. So, now I go on, sell my house, sell my car, sell my wife and buy as many shares of that company I can afford. Is this illegal? Will I get sued if someone finds out?

Your question doesn't make any sense at all. The CEO is just an employee of a company. CEO's get hired and fired all the time. Why would the loss of a CEO make or break a company? And why do you think the value would skyrocket if bad news was announced?

[rs20]

Anyway, what you describe qualifies as insider trading, and as such would most likely be illegal, depending on what country you're in.

I don't think so.
The OP does not work for the company, does not know anyone who works for the company, and simply overheard some personal gossip from someone who also does not work for the company and is not (presumably) invested in the company either.
About as non insider trading like as you can get I suspect.

"Insider trading is the trading of a public company's stock or other securities (such as bonds or stock options) by individuals with access to nonpublic information about the company."

The definition does not hinge on "insider", it hinges on "nonpublic". Is the information about the CEO's condition nonpublic? I think so.

But eh, I'm not a lawyer, just trying to interpret the definitions on the internet.

[EEVblog]

Anyway, what you describe qualifies as insider trading, and as such would most likely be illegal, depending on what country you're in.

I don't think so.
The OP does not work for the company, does not know anyone who works for the company, and simply overheard some personal gossip from someone who also does not work for the company and is not (presumably) invested in the company either.
About as non insider trading like as you can get I suspect.

"Insider trading is the trading of a public company's stock or other securities (such as bonds or stock options) by individuals with access to nonpublic information about the company."
The definition does not hinge on "insider", it hinges on "nonpublic". Is the information about the CEO's condition nonpublic? I think so.
But eh, I'm not a lawyer, just trying to interpret the definitions on the internet.

If you want to go by Wikipedia you linked:

Trading on information in general[edit]
Not all trading on non-public information is illegal insider trading. For example, a person in a restaurant who hears the CEO of Company A at the next table tell the CFO that the company's profits will be higher than expected and then buys the stock is not guilty of insider trading—unless he or she had some closer connection to the company or company officers.

That's almost the same as the case here, except that the OP heard the information from someone who does not work for the company. So once removed again from a company source.

[EEVblog]

Your question doesn't make any sense at all. The CEO is just an employee of a company. CEO's get hired and fired all the time. Why would the loss of a CEO make or break a company?

Altium went from 10 cents to 10 dollars a share once the founder and CEO (who was very famously taking the company in crazy untenable directions) was booted 
Ok, it took a few years, but hey.

[MrOmnos]

Anyway, what you describe qualifies as insider trading, and as such would most likely be illegal, depending on what country you're in.

I don't think so.
The OP does not work for the company, does not know anyone who works for the company, and simply overheard some personal gossip from someone who also does not work for the company and is not (presumably) invested in the company either.
About as non insider trading like as you can get I suspect.

"Insider trading is the trading of a public company's stock or other securities (such as bonds or stock options) by individuals with access to nonpublic information about the company."

The definition does not hinge on "insider", it hinges on "nonpublic". Is the information about the CEO's condition nonpublic? I think so.

But eh, I'm not a lawyer, just trying to interpret the definitions on the internet.

Panic I guess!

[RGB255_0_0]

You wouldn't want to buy shares unless you think the company, under current leadership, is doing poorly and a change in CEO should help the embattled company.

You should also question the reliability of the source. Maybe he's spreading a rumour for his own gain; hoping the people he tells the gossip will think and act like you, and then sell his stake.

[iaeen]

Quite apart from the question of insider trading, there's the question of patient confidentiality.

In the US, your doctor friend broke some very strict laws by telling what he did, and he would get into big trouble if it ever come to light. I'm not sure what the laws are elsewhere, but I wouldn't be surprised if other countries had similar rules.

Also, the fact that this was a patient confidentiality violation might have bearing on whether this would be insider trading... I'm not a lawyer, but I think this situation sounds sketchy all around.

[Wilksey]

Only if you publicly post your intentions on the interwebz...
Technically with inside information, if it affects the prices to the point where you become very rich, very quick, you can get done for fraud, but I expect quite a lot of people already do and get away with it.

Luck of the draw!

She'll be right!

[iaeen]

If you want to go by Wikipedia you linked:

Trading on information in general[edit]
Not all trading on non-public information is illegal insider trading. For example, a person in a restaurant who hears the CEO of Company A at the next table tell the CFO that the company's profits will be higher than expected and then buys the stock is not guilty of insider trading—unless he or she had some closer connection to the company or company officers.

That's almost the same as the case here, except that the OP heard the information from someone who does not work for the company. So once removed again from a company source.

That doesn't sound like "almost the same case" to me. In the example you have some random third party to a conversation. In the OP's situation you have someone with privileged information directly sharing the information. I doubt it matters that the doctor doesn't work for the company. He has professional access to private information, and the OP has a close connection to the doctor.

Even if you are right, this is a grey area and would probably have to get dragged through the courts to be settled (assuming it got out). I doubt the OP wants to go there.

[StuUK]

Definitely NOT insider trading but the Dr is a naughty boy!!

[rstofer]

Anybody remember the Marth Stewart case?  I don't recall the exact details but I do remember that 'orange' was involved.

If I thought there was anything to the rumor, I might buy (or sell) on momentum but I certainly wouldn't want to be the first one in or out.

Losing a CEO can't be good for a company.  If the CEO was truly worthless, the Board of Directors (of a publicly traded company) would probably have ousted him a long time back.  That's their job as agents of the stockholders.

 I would tend to be thinking about shorting the stock.

[kfnight]

It is a mild case of insider trading, but the amount of shares you would be purchasing are so small nobody would care.

[XFDDesign]

"So, now I go on, sell my house, sell my car, sell my wife and buy as many shares of that company I can afford."

I'm thinking people are missing the deliberate trolling.

Selling a house isn't a one-hour affair, and unless he's in a particularly unstable region, I don't think he can 'sell' his wife either. 

[MrOmnos]

"So, now I go on, sell my house, sell my car, sell my wife and buy as many shares of that company I can afford."

I'm thinking people are missing the deliberate trolling.

Selling a house isn't a one-hour affair, and unless he's in a particularly unstable region, I don't think he can 'sell' his wife either. 

Of course this is not true but this not trolling as well. It is a hypothetical question to invoke discussion on this topic. You thought I sold my wife?

[vodka]

How much is the wife?

Like a life imprisonment   

[Circlotron]

Why would the death of a CEO cause an increase in stock price? That seems counter-intuitive to me.

If it was Dilbert's CEO and his underlings it probably would.

[StillTrying]

Perhaps you could hedge your bets by blackmailing the doctor.

[Red Squirrel]

This got me thinking... if you got in a time machine to go look at future stock prices and came back, is that insider trading?