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

Anonymous

06 Mar 2020

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General Investing

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?

Discussion (13)

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I feel that you should not buy stocks based on anybody's tip. There are countless people out that that listen to hot "tip" and buy and most of them did not do well. You should always do your own due dilligence before buying into any investment.

Dubious from any angle it seems.

discuss with Your father the performance chart of SP500 ETF ticker: VOO

much better performance probability than a single stock with some other problem.

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Depends on what the friend told him. New orders signed? Rumor of takeover? Market sensitive news?

If your father still want to buy, make sure that there are no paper traces and the infomation are spread verbally.

If the friend just told your father to buy xxx company as it is a good company, undervalued based on publicly available information. These infomation are hard to justify them as market sensitive.

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

Nice question.we won't know if it is considered insider trading. It's a risk but if CAD is not able ...

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