How not to insider trade

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Firms Involved

  • Millenium Pharmaceuticals

Year of the event


Description of the case

In 2008, Takeda agreed to buy their competitors Millenium for an amount of 2008. However, shortly before the acquisition was announced, several people stumbled upon the information. In particular, John Michael Bennett learned about it through a friend working at a human resources consultancy firm. He used this information to invest heavily in short-dated out-of-the-money call options on Millenium stock[1]. While he made a significant amount of money, the SEC identified the fraudulent transactions and linked them to Bennett, who pleaded guilty to criminal insider trading in 2013[2].


  • Do not insider trade
  • If you do, do not buy short-dated out-of-the-money call options (but really, you shouldn't)


  1. Bloomberg, Insider Trading Buddies Nailed by... Metrocards?
  2. SEC, SEC Charges Independent Filmmaker With Insider Trading