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How well can you keep a secret? As an employee, you know things about your company that no one on the "outside" knows, such as an impending merger, the quarterly financial results, pending litigation, and a big new client coming on board. Like money burning a hole in your pocket, those hot little nuggets of inside information in your head are dying to get out. If Wall Street only knew what you knew. But beware of what you say and to whom you say it, because you could be guilty of insider trading.

Insider trading? How could an average employee such as yourself be engaged in insider trading? Aren't insider trading problems limited to CEO's, brokers, executives and famous homemaking gurus? Not at all. Insiders are not limited to the inner circle of high-power executives. In reality, they include you and me. An insider is anyone who possesses "material non-public information." This is non-public information that might be helpful in the decision to buy or sell securities. That means every employee, even the families and friends of employees, can be insiders if they have access to material non-public information.

Federal law is pretty clear about insider trading. It strictly prohibits individuals who possess material information from using that information to buy or sell publicly traded securities or to tip anyone else. Even information that is accidentally or inadvertently received cannot be acted upon.

If you're standing in an elevator and overhear someone from fiscal talking on his cell phone about the next quarter's earnings, you can't act upon that information. In order to trade stock you must wait for the information to become available to the general population. Some companies advise employees to wait as long as 24 hours after the information is made public in order to avoid the appearance of impropriety. This even applies to the securities of other companies who do business with yours.

This can be pretty confusing because just about everything we learn at work might be categorized as inside information. First, we need to ask the question, "What exactly is inside information?" If someone can't read about it in the paper or research it at the library or internet, it's probably inside information. This includes things such as significant contracts, financial information or earnings, management changes, new products, litigations, stock splits, restructuring, reorganization, and anything else that can be used to gain an investment advantage.

Take a conservative approach to inside information. If in doubt, ask a supervisor or company legal counsel. A good way to learn what's not inside information, is to go to the company's website. Look in the company information section, executive profiles, pressroom, or products pages to see what's available to the general public. If the information is not there, you need to ask before talking about it.

The second question one needs to ask is, "How far does this go?" Can you never talk about work at all? What can you say at a dinner party? Usually there's nothing wrong with talking about how YOU are doing at work. Your trials and tribulations are one thing but the company's trails are another. You may be crossing a line when the dinner party conversation moves from how you're doing to how the company is doing. Ask yourself, "Could the information be helpful to someone who is considering buying or selling securities?"

It might seem odd that a regular employee needs to protect information like a secret agent. It might sound strange to hear the words, "I'm sorry but I can't talk about that," coming from your lips while mingling with friends. But it's not a game. The ramifications of insider trading are huge. Because it is a Federal issue, the Company must take even very small breaches of security seriously.

Beneath the surface, you should view the knowledge of inside information as a trust issue. As an employee you hold a special position of trust and confidence with your employer. The Company trusts you with its business and you are obligated to respect that trust relationship. The fact that you can be trusted is a reflection of your character. A person of character understands ethical boundaries, shows self-control, and respects rules no matter who's around.

You might be the kind of person who likes to keep secrets or one who spills the beans. Either way, you need to understand what is (and is not) inside information and what you can (or cannot) do with that information. Whether or not you are an executive or have your own cooking show, understanding insider trading keeps you from getting burned.