Material Non-Public Information
Material Non-Public Information (MNPI) is information about a company that could affect its stock price and is not yet available to the general public. Trading on MNPI is illegal insider trading.
The Trader's Take
The Signal
Understanding MNPI helps identify when insider trades might be based on privileged information. Legal insider trades reported on Form 4 are made when insiders don't possess MNPI, or through 10b5-1 plans.
The Noise
Not all insider trades involve MNPI—many are routine transactions made during open trading windows when insiders don't have material information.
Actionable Insights
- 1Insider trades during blackout periods or before major announcements may involve MNPI concerns.
- 210b5-1 plans help insiders trade legally even when they might later possess MNPI.
- 3Large trades right before earnings announcements can raise MNPI questions.
- 4Understanding MNPI helps distinguish legal from illegal insider trading.
Regulatory Context & Context
Common Misconceptions
Not all non-public information is material—only information that could affect stock price.
Information becomes public once it's been disseminated widely enough for the market to absorb it.
Insiders can trade legally if they don't possess MNPI or use 10b5-1 plans.
Frequently Asked Questions
What makes information "material"?
Information is material if a reasonable investor would consider it important in making investment decisions—essentially, information that could affect stock price.
Can insiders trade if they have material non-public information?
No, trading on material non-public information is illegal. However, insiders can use 10b5-1 plans to trade legally even when they might later possess MNPI.