Tom Hardin

So materiality would be if the information was public, it would move the stock price.

Non-public, public is obviously pretty clear.

And so an example would be

I'm from a small town in New Jersey.

If I talk to the Starbucks there and said, how'd your sales go this quarter?

And he tells me the exact information.

I can't trade Starbucks stock because it's one store in New Jersey.

If I fly to Seattle, play golf with Howard Schultz and say, Howard, what revenue and what earnings did you make last quarter?

And he tells me,

I can trade the stock long or short because Wall Street has estimates that they're expecting these companies to either beat or miss.

And so if you know that the company is going to beat those estimates or miss those estimates, you could be long the stock if they're going to beat the estimates or short the stock if you're going to miss.

So that's kind of what's illegal inside information.

Well, she was Belfort.

Oh Right.

Yeah.

Okay in the 80s.

I think at the time it was like a hedge fund or institutional money.

Yeah.

And the first sort of insider trading arrest in the real industry happened in the 80s and 90s with Michael Milken was a big name, Ivan Borski.

And so insider trading prosecution picked up then.