I need advice on Insider Trading dilemma?

Question

Hello, ive just recently come into the world of business and stock trading and today I was wondering about what could happen if i was in this scenario (just remember this is hypothetical and I'm kind of new to all of this):

If i owned shares in a company that my employer did business with (which was approved by the company secretary) and wanted to sell those shares after a while, what would you suggest i do if i found out that the company i had shares in was bound for a fall and possible bankruptcy but only found this out AFTER i had already made the decision to sell my shares for other non related reasons. Would you suggest i hold onto those shares so it didnt look like insider trading or is there a way to get rid of them without it looking suspicious.

Answer 1

The most obvious way to avoid looking suspicious to is avoid trading any company about which you are likely to get inside information.

If you do trade stock in such a company, I recommend you file a written trading plan with your brokerage (and your company compliance officer if you have one) at the time you buy it, specifying under what circumstances you will want to sell. You can always modify that plan as circumstances change. As long as your trades then follow the plan you specified you can resolve any suspicion that may arise.

Since you cannot control other people you cannot prevent them from getting suspicious when you trade stock in a company about which you may get inside information. The best you can do is demonstrate that your trades were not based on inside information.

Answer 2

You have to report your intention to sell anyway and everything's on paper; if your discovery occurs subsequent to making it official that you intend to sell, you wouldn't have a concern so long as there was also no possibility of you discovering this bankruptcy prior to the intention to sell.