Insider trading is any trading performed using non-public knowledge. Theoretically even a pre-scheduled trade could be insider trading, if it relied on non-public knowledge which remained non-public until the time the trade executes. Of course, that's a pretty hard scenario to concoct, so generally pre-scheduled trades 3+ months out are considered safe for even high-level insiders. Not to mention all the extraneous movement that might happen within that same time period that could very well nullify any knowledge advantage.
Interesting fact: commodities were not subject to such a law in the USA until Frank-Dodd Act. The rule was named for Eddy Murphy, who played a commodities trader in Trading Places[1].
The reasoning, as I heard it, was that all farmers who hedged their own crops with commodities trading, had some amount of insider knowledge just by looking at their own farm/crop/weather. Stealing a data report before it is publicly announced, however, seems like it would violate some laws. Paying to access reports early seems to be a lucrative offering of some of the data providers.
Doesn't there still have to be some judgement call? I would assume Insider Trading means trading on non-public knowledge that will significantly move the stock price, not just any old information that is not public. All kinds of employees have non public knowledge of things going on in a company that may or may not affect the stock price.
What would happen if a Executive found out about a data breach, sold some stock, but when the breach was announced later the stock price remained flat or went up (just for the sake of argument). Would that still be insider trading?
You are correct. I was a little loose in my language, and should have said material non-public information. Material information is exactly what you describe: Information which would be reasonably expected to affect the market.
