So if you saw two CEOs and heard they were talking about a merger, but then you also combine it with non material public information, would it still be a violation to trade on the information?
if you heard material information about the merger then yes … mosaic theory is nonmaterial info. … you can heard non material info and add your analysis and conclusions = no violation.
What’s interesting is that if you hear rumors from a third party (who is not directly connected to firm, but that if true would be considered inside information you can use that to make your own investigation. If you confirm this on your own you are good to go.
Once in receipt of material non public information, mosaic theory don’t hold any more.
Great point! I think this is the part about ambiguous information under material non public information. If the source of information is sufficiently ambiguous, then it can be reasonably classified as non material.
ambigiouty is a bitch but yea ambiguous info is not material.
if the bum outside the nyc subway is yelling that walmart will be taken over by the corner bodega, that is sure as hell not material.