Insider information is information about a company that has not been released to the public and is material. Material means that the information would likely affect a reasonable investor’s decision on whether to trade (that is, buy or sell) in that company’s stock.
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Insider Information
What is insider information?
What should I do?
Trading in a company’s stock on a public stock exchange (such as the New York Stock Exchange) may be a crime if you have insider information about that company. So, if you become aware of insider information about a company, such as Coty or one of our business partners, do not trade in that stock until the information has been released to the public and there has been sufficient time for the public to take in the news.
Sharing insider information with those (such as a friend or family member) who are not authorized to receive it can also be a crime known as “tipping.” If that person, after hearing the information, trades in the company’s stock, they violate the law as well.
Q&A
A: Yes. The fact that the CEO may need to be replaced is something that a reasonable investor might consider relevant when deciding on whether to buy or sell stock in the company. That makes the fact “material,” and since it has not yet made the news, it would be nonpublic insider information. Do not share the information until it has been released to the media and the public has had time to absorb it.