Is there an issue with an "insider" that had "material" information purchasing private stock 3 weeks prior to a merger announcement with a publicly traded company? Where can I find out more information about this?

Thanks.

SEC. Generally there is a black out period but I do not work for a publically traded bank.

I don't either, but there is a reputation risk, and if the amount is great enough, a lawsuit by the person selling the stock.
Possible comment, As an insider, she had access to all the stockholder names, and coherced me to sell my stock, knowing that the company would be sold for much more!

Would it make any difference if they were exercising stock options? How would we know if that's what they were truly doing? The timing and the amounts is what has me concerned and the fact that we have not seen this previously.

How would you approach this incredibly sticky situation? If we discuss it with anyone in management, it won't go over well regardless of who we discuss it with. If it turns out to be completely legitimate, then we may have scars from questioning the activity yet it's our job to investigate and reach a conclusion. This is very stressful to say the least.

When I worked for a publically traded bank and they were in the process of purchasing another institution, the corporate treasurer would declare a black out period and inform employees and those with stock options they could not be exercised during the black out period. He would not go into details as to why the black out period but those in the loop knew why.

most companies have a policy on insider trading, and prohibits anyone with non-public information from trading or using said information for personal gain, extending to family members as well. Stock options are not exempt in our policy, but we may sell stock during this time only if the stock is "from a dividend reinvestment", so very limited.

SEC also has strict guidelines on insider trading.

I suggest contacting your outside legal counsel involved in the acquisition on the side and present the facts as you know them and ask for guidance.

How recent was this transaction? It has been awhile since I dealt with all this so bear with me, things may have changed. If you are filing Form 4s for the transactions, the market will pick it up and tell you that you have a violation. Or at least Nasdaq will. They have all this in their computers and they will pick up on it.