Last week, Paul Scott wrote the following about the recent Sosandar (LON:SOS) placing

So imagine my surprise, when my broker rang me on 5 July, to ask in the usual way, if I wanted to be made an insider on a fundraising. That's the way it's done, on a recorded line, I have to give specific consent to be made an insider (which only happens rarely).

This  got me thinking about insider dealing and how it is legally constituted. In particular, there are two situations currently where I am unclear as to where I stand legally:

  1. I was approached a few weeks ago by a friend of mine asking if I wanted to subscribe to a placing which is due to happen at the end of this month. The approach came by email, unsolicited, and with no mention beforehand as to whether I wanted to be made an 'insider'. My friend has been hired by the firm, an AIM listed company, to generate interest in the placing from his network and will presumably earn a commission from the investors he recruits. So am I an 'insider'? Am I allowed to publish here or other forums the name of the firm? Am I allowed to trade the stock (I don't currently hold)? 
  2. The second story relates to an AIM firm who I approached recently with a business development idea which could have big implications for its earning. They are currently researching the idea and early indications are positive but there is nothing to write home about yet. So the question again is am I an 'insider' to the idea (again nothing has been said or signed) and does that prevent me from trading the shares? Or, if they formally decide to develop it, do I then become an insider automatically until this is made public? 

All opinions, especially legal ones, would be most welcome.



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