Is Spying on Corporate Jets Insider Trading?

One of the stranger aspects of Bloomberg's story about the FBI's Tip Machine, also known as former Morgan Stanley director David Slaine, is that one of his original tips involved a fund manager who was allegedly paying off people to discover who was coming in and out of Teterboro Airport, the small New Jersey airport catering to many New York area private corporate jets.

There are a number of things that makes this a strange start for a relationship that has led to the conviction of nearly a score of people on securities law violations. But the number one thing is this: paying off people to provide tips about the traffic at the airport is not illegal. And neither is trading off of those tips.

Most people who work at Teterboro are unlikely to be under any duty of confidentiality. They may freely discuss the who was using the airport, even if those people happen to be Very Important Investment Bankers. They may even speculate on what may have brought the VIIBs to Teterboro and buy and sell stocks based on that information.