Re: [Gnu-arch-users] a business model for free software

[Andrew Suffield]

On Wed, Mar 29, 2006 at 03:06:15PM +0900, Stephen J. Turnbull wrote:
> >>>>> "Robin" == Robin Green <address@hidden> writes:
> 
>     Robin> OT: I don't understand why paying employees (or anyone
>     Robin> else) in stock isn't inevitably going to be insider
>     Robin> trading.

> Second, "insider trading" as legally defined involves taking advantage
> of "strategic news" which will clearly move stock prices.  Knowing
> "inside information" such as trade secrets does not allow you to
> predict price movements with accuracy.  I believe that there's some
> requirement that the news be strategic (ie, under the firm's control),
> as well.

My understanding of insider trading law is that it is targetted at
preventing you from doing this:

Buy stock

Issue press release reporting the good news (increasing the share price)

Sell stock

Issue press release reporting the bad news (reducing the share price again)

In other words, market manipulation. If you aren't publishing
information about the company (via press releases or telling relatives
or whatever), because you're just an engineering grunt, you're usually
safe. I think that's what you were trying to say.



Of course, the laws aren't that precise; they can and have been
applied to other 'related' issues. So, consult your lawyer before
selling your stock, don't take this mail as advice.

But I think the concept of paying people with stock can be made to
work without breaking such laws. There's probably at least one legal
way and at least one illegal way to do it.

[I find Tom's arguments in favour of doing this to be quite weak. I am
uncertain whether the idea itself would be better or worse than the
status quo; economics isn't my field.]