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Some Amazon Employees Bought NYC Condos Before News of HQ2 Location Emerged, Says WSJ Report (thehill.com)
An anonymous reader quotes a report from The Hill: At least two Amazon employees reportedly purchased condos in a New York City neighborhood before news emerged that the area had been picked to host the company's second headquarters. The employees decided to buy units in a new 11-story condo building in the Long Island City neighborhood of Queens just before the first reports of Amazon's HQ2 location were released this month, The Wall Street Journal reported Tuesday. While employees of companies are barred from buying or selling stocks based on information that has not yet been made public, lawyers told the Journal that they were unaware of any such ban affecting real estate transactions. There are no exact numbers on how many units have gone into contract in the Long Island City area since the announcement, but the Journal reports that one brokerage firm sold nearly 150 units just last week, 15 times its normal volume. Earlier this month, Amazon announced plans to split its second headquarters evenly between New York's Long Island City and Arlington County's Crystal City neighborhoods.
This sort of problem has arisen before and solved by requiring people knowing about big deals (i.e. accountants and lawyers) having to abide by codes of conduct within their professional associations. Even the appearance of a conflict of interest should be avoided to stay onside.
I wonder if Google employees in general have such codes of conduct written into their employment contracts.
don't blame the employees for buying condos before the announcement. I have no problems with this as long as the purchase was for their own use and not to resell after the announcement.
How is this not insider trading? Buying real estate using information not known to the public should result in prosecution. Martha Stewart served jail time for less.
According to the SEC , As defined by the courts, illegal insider trading refers to purchasing or selling a security while in possession of material, non-public information concerning that security, where the information is obtained from a breach of fiduciary duty, or a duty arising from a relationship of trust or confidence.
So, since real estate is not a security, that is how this is not insider trading. And by the way, Martha Stewart was not convicted of insider trading; she was found guilty in March 2004 of felony charges of conspiracy, obstruction of an agency proceeding, and making false statements to federal investigators.