facebookMy dad passed me $50k to buy a single stock on his behalf based on a tip from his friend who works in that company. How do I know if it is considered to be insider trading? Will I be investigated? - Seedly
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Anonymous

Posted on 14 Mar 2019

My dad passed me $50k to buy a single stock on his behalf based on a tip from his friend who works in that company. How do I know if it is considered to be insider trading? Will I be investigated?

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10 answers

Discussion (10)

Wow, that's really a pickle, let me just take out my biz law textbook to help you out here blows dust

okay, so according to Singapore's Securities and Futures Act (which prohibits insider trading) under section 219, people who are not connected to the corporation who recieve price -sensitive information will fall under this act, which means you. Even if you pass this information to another friend, who tells a stranger at a bar, who then buys that stock, that stranger will still be liable for violating the Securities and Futures Act for insider trading.

So your dad, you and of course your dad's friend will all be liable for insider trading if found out. I highly suggest to politely decline participating in this and talking your dad out of it - you are looking at possible criminal liability - you will be charged in court and if convicted, be deemed a convict. Under section 221 you will be looking at a max fine of $250 000 or imprisonment of up to 7 years. If you're lucky to get off with a lighter civil liability, you are still looking at a penalty of 3 times the profits gained, or $50 000, whichever is greater.

I got this all off "introduction to business law in Singapore" by ravi chandran 4th edition. If you don't believe me, buy the book, check page 278 -280. It's cheaper than getting fined 50k and going to jail for 7 years.

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1 more comments

Kenneth Lou

Kenneth Lou

15 Mar 2019

Oh wow this is intense. Anyway I remember that Business Law book very well! Ravi Chandran was a great professor.

Kenneth Lou

Kenneth Lou

15 Mar 2019

Lol I just read that last line: "It's cheaper than getting fined 50k and going to jail for 7 years."

Post

Bibiana

Bibiana

Level 12. Master

Posted on 23 Dec 2019

Aside from what everyone shared (which is very good), putting $50k into one single stock seems a lot! What if the news is fake?

0

Post

Bjorn Ng

Bjorn Ng

Level 15. Grandmaster

Posted on 22 Dec 2019

There is a saying: "You can do anything you want, but just don't get caught".

It is definitely a ri...

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