Mosaic Theory

An interesting point I studied today was the Mosaic Theory. It basically says you cannot be in violation of insider trading if an analyst comes to a conclusion about a company/share etc. based on public information and/or immaterial nonpublic information.

Usually a conclusion from a respected analyst would have an effect on the price of the stock. This would mean the conclusion is material and you should not act on this unless it is disseminated to the public. But the mosaic theory forms an exception to this. Investors can either do the work the analyst did themselves, or become a client of the analyst.

Probably a silly question but does anyone disagree with this? Investopedia.com says some think it can cause a violation of the insider trader rule so it would be good to hear from people who think this.

220 days until the level 1 exam.