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Management article
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Reference no. SMR4318
Published by: MIT Sloan School of Management
Published in: "MIT Sloan Management Review", 2001
Length: 4 pages

Abstract

You are on a crowded elevator standing next to a couple of executives from a company with offices on the floor just above yours. They are talking in low tones about a surprise announcement coming the next day. Their firm, AGA Software, is being sold to a big, famous technology company! ''My options are going to be worth millions!'' you hear one of them whisper to the other. Assuming AGA is a publicly traded stock, can you run home and buy AGA shares without breaking the law? Knowing when you can legally trade on inside information and when you cannot is tricky. This article will help you better understand the legal minefield.

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Abstract

You are on a crowded elevator standing next to a couple of executives from a company with offices on the floor just above yours. They are talking in low tones about a surprise announcement coming the next day. Their firm, AGA Software, is being sold to a big, famous technology company! ''My options are going to be worth millions!'' you hear one of them whisper to the other. Assuming AGA is a publicly traded stock, can you run home and buy AGA shares without breaking the law? Knowing when you can legally trade on inside information and when you cannot is tricky. This article will help you better understand the legal minefield.

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