why is having a discussion with a coworker about a private meeting with the company’s ongoing class-action lawsuit an insider trading violation?
I thought insider trading violation has to do with material nonpublic info being released to the public or someone outside the firm?
All that’s needed to commit an insider trading violation is for someone (whether an insider or outsider) to place a trade based on non-public information. In this scenario, these coworkers are discussing non-public information, and therefore will commit a violation if either places a trade based on that information. Same applies to anyone else in the company.
When non-public information is released publicly, it no longer is considered inside information. Keep in mind this would be different than an insider telling a friend some non-public information. If it’s not available to the general public, it’s still inside information. As soon as it can be accessed by the general public (e.g. in a newspaper or press release), it is no longer consider insider info.