10_29_09 - Class Notes Lesson 9 Security laws What is...

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Class Notes –Lesson 9- Security laws What is material information? - Information that a reasonable investor will want to know when deciding to buy, sell or hold the stock Material info is not - 1. Black & white - 2. Not always financial Types of Material Info - 1. M&A - 2. Changes in management - 3. FDA news on a potential drug - 4. Product launches or delays - 5. Product recalls - 1. When did you know about it? (Must get impt news out to the market as soon as possible) - 2. When did you disclose it? - Merger-> MUST disclose within 4 days of it being official - Product-> MUST disclose if co has declared launching it on a particular date/ product is really important to the company / problems with product Insider Trading - The act of making a profit or preventing a loss by trading on material information that is not public - Eg: Martha Stewart - Blackout list (for insiders) – list developed by the general council (a list of people who have access to inside information) Safe Harbour - Meant to protect management when making forward looking statements
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10_29_09 - Class Notes Lesson 9 Security laws What is...

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