Entering the stock market, ethics, etc

Jasconius

So. I work for a company. A big company. Their stock hit rock bottom about 3 years ago but has been creeping up, last quarter their stock jumped almost 50% and their next quarterly is going to be drastically better than the previous, so I expect the stock to at the very least continue rising. Also a lot of their competitors are tanking.


I want to start investing. The company offers stock to employees but only at set periods of the year, and I think the next one is not for 4 months. So that, combined with the fact that because of my finances, it would be much easier for me to progressively invest... buying a few dozen shares per month, whatever I can save (which will get progressively higher as I get some of my other debts paid off this year).

So

1) Is there an online investing setup that enables this sort of micro-buying at regular intervals instead of one big slam like the company offers internally

and

2) Are there ethical/legal implications to privately buying shares in a company you work for, based on the little slivers of information that get leaked out about the health of the company, from quarter to quarter? As long as I am not sharing them with people outside of the company, which I wouldn't be doing.

*edit* just checked, their stock jumped 51% in less than 3 months.. so yeah.. I want to get into the market as soon as I can.

khain

For the first question any stock broker can do that, Scottrade would be one example though there are many others. For the second question, there is something called insider trading which is buying or selling of securities by individuals with potential access to non public information. This is illegal in the US and other countries if you trade in such a way that it takes advantage of your access to said non-public information. However, I would say that because your asking this chances are pretty good that you don't actually have access to non-public information that you could use to benefit your trading.

Jasconius

Well, I do not have *details* - but every now and then, hints are dropped that give you a general sense of what the earnings reports will look like.

I am aware of insider trading, but I do not have statistical knowledge prior to public disclosure, only vague ideas in a pro-or-con sense. I am not sure if such things apply.

Nostregar

With something like this, my personal opinion is that if you have to ask about the nuances of the legality, you probably shouldn't do it. I understand that this is a paranoid position to take and that you stand to make money, but that is simply how I approach it.

Maybe ask somebody at your company that deals with these things? Who handles the stock stuff you were talking about? They'd probably know.

If you're basing your desire to buy the stock off of information you know not to be public, I imagine it's illegal and even if it isn't I would judge that unethical. That's just me though.

Inquisitor77

The long story short is that no, you are not doing anything illegal by purchasing the stock of your employer. You will need to notify the SEC of your relationship with the company, but you are not an executive or someone who is both privy to extremely sensitive information or have other interests that would directly compete with being a stockholder in the company, then you aren't doing anything wrong. In practice, this generally translates into being an executive of some type, being told executive-level information (re: Martha Stewart), or being a regulator of some sort.

If you are intent on making these purchases, I would recommend doing this through a broker (Charles Schwab, etc.) so that they can advise you on what you need to do to make sure everything is on the up-and-up. Also, I would investigate any benefits your company may offer employees that might make such purchases more beneficial to you (for example, some companies offer matching or price guarantees if you purchase under certain situations).

There is another question of whether or not the purchase is a good idea. I believe the technical term for employees who buy large amounts of their own company's stock is "fish". You seem pretty intent on going through with this, so I'm not going to bother trying to change your mind.


PS - If your company is going through a merger, acquisition, or other such "special" situation, then the rules change. Each situation is different, but the gist is basically that you can't buy stock when these things are in the works.