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Three Equifax Managers Sold Stock Before Cyber Hack Was Revealed

bloomberg.com

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Re: Three Equifax Managers Sold Stock Before Cyber Hack Was Revealed

#61

Post by thephyber »

ChuckMcM wrote: post #34

That seems incredibly stupid. The CFO especially would be hard pressed to convince anyone either that he 'didn't know' there had been a breach or define himself as not an 'insider.' If the facts are as reported these folks are in a world of hurt.

It perhaps was stupid, but you forget that the burden of proof is the other way around.

I was under the impression C-suites and directors had to file with the SEC in order to sell stock. I'd wager they did and that's how Bloomberg found out about it.

Re: Three Equifax Managers Sold Stock Before Cyber Hack Was Revealed

#62

Post by 21 »

eigenvalue wrote: post #56
21 wrote: post #51

So one guy sold 1 mil of stock, the stock dropped 6%, so he avoided a 60k loss. Let's say he expected a 20% drop, and he saved 200k. If a were a millionaire, I wouldn't risk prison for 200k. Even the litigation to avoid prison could cost 100k. And this is the kind of thing you know all angles will be looked into (it took a news agency a few hours to unearth this). If he did it (insider trading), he is very stupid.

The stock is going to drop a lot more than 6%!

If you are so sure, short it now and make a lot of money.

Re: Three Equifax Managers Sold Stock Before Cyber Hack Was Revealed

#63

Post by [deleted] »

dragonwriter wrote: post #40
jzwinck wrote: post #32

Earlier quoted context omitted.

No there is not a law against giving legal advice if you're not a lawyer. It's lawyers who are sometimes prohibited from giving legal advice. Non-lawyers have the usual freedom of speech, restricted in the usual ways. Claiming that you are someone you're not on the Internet is so commonplace it is hard to see where any trouble would come of it by itself. Again it's different if you knowingly cause harm to others. I'm…

> No there is not a law against giving legal advice if you're not a lawyer. In most (all, I think) US jurisdictions, providing legal advice is practice of law, and doing it without a license to do so in the state is prohibited (usually, a crime.) This isn't not legal advice and I am not a lawyer. Consult an actual lawyer licensed in your state before deciding whether or not you should provide legal advice.

[deleted]

Re: Three Equifax Managers Sold Stock Before Cyber Hack Was Revealed

#64

Post by airza »

jdmichal wrote: post #14
korethr wrote: post #7

So, does this count as insider trading? My intuition says 'yes'. But my intuition about a thing and what the law says don't always match.

Insider trading is any trading performed using non-public knowledge. Theoretically even a pre-scheduled trade could be insider trading, if it relied on non-public knowledge which remained non-public until the time the trade executes. Of course, that's a pretty hard scenario to concoct, so generally pre-scheduled trades 3+ months out are considered safe for even high-level insiders. Not to mention all the extraneous m…

If all trades based on non-public knowledge were insider trading, the financial analysis industry would not exist

Re: Three Equifax Managers Sold Stock Before Cyber Hack Was Revealed

#65

Post by icantdrive55 »

jdmichal wrote: post #10
stygiansonic wrote: post #9

Earlier quoted context omitted.

So, does this mean just the transparency via regulatory filings is enough to absolve them of any legal liability?

It means that someone from the SEC should probably be looking into the trades. It would take a court to decide any legal liability, and charges would be the result of such SEC action. Having not reported the transactions in the first place would have likely made the sales less defensible -- good ol' "why were they hiding if they aren't guilty?"

It looks like this is the way to get around SEC laws.

1. Have a large stock/hedgefund/whatever company. Kinda like Steve Cohen at SAC.

2. Hire hungry employees to take the risk of getting/profiting from Insider Information. (Yes--there are a thousands of Series 7 sociopaths that will do anything to get ahead--including spending a few years at the locked up federal Resort. "Just make money. Happy boss happy life! Plus--how do I keep the out of my league Professional Shopper happy? Really dude?"

3. As long as the head honcho doesn't know exactly where the sociopath got the stock tip, he can claim plausible deniability on his winning wad. It helps to have an army of good lawyers, and very deep pockets.

4. Pay some expected civil penalties, but stay clear of Criminal Conviction. Keep that privilege to steal. That's what's important.

5. Keep your license, and go back to the game of exploiting a rigged system.

6. I'm talking about guys like Steve Cohen. (In my mind, it looks like as long as you can't be directly tied to the insider tip; you Win! Yea--for the boys! Yea--for having money to buy your right to win!).

7. In all honestly, the only real money my deceased father made on the stock market was over a tip at Thanksgiving giving after his daughter's father and in-law got drunk and told him to invest in his company. This was twenty years ago. My father was a vocal critic of anyone who cheated the system. He stopped with his chest beating holier than thou speaches after that trade. (I don't even think my dad saw it as insider trading that night. It was a few months later it hit him. I knew, but I knew my father desperately needed some viable stock tips. Tips that most guys throw around--especially the successful Traders.

https://www.ft.com/content/efda2ca2-ec69-11e6-930f-061b01e23...

Re: Three Equifax Managers Sold Stock Before Cyber Hack Was Revealed

#66

Post by nilved »

yen223 wrote: post #45
korethr wrote: post #7

So, does this count as insider trading? My intuition says 'yes'. But my intuition about a thing and what the law says don't always match.

"But my intuition about a thing and what the law says don't always match" I wish more people on this forum recognized this

Recognized that the law doesn't apply to rich people?

Re: Three Equifax Managers Sold Stock Before Cyber Hack Was Revealed

#67

Post by stordoff »

eigenvalue wrote: post #56
21 wrote: post #51

So one guy sold 1 mil of stock, the stock dropped 6%, so he avoided a 60k loss. Let's say he expected a 20% drop, and he saved 200k. If a were a millionaire, I wouldn't risk prison for 200k. Even the litigation to avoid prison could cost 100k. And this is the kind of thing you know all angles will be looked into (it took a news agency a few hours to unearth this). If he did it (insider trading), he is very stupid.

The stock is going to drop a lot more than 6%!

If it is, wouldn't the best course of action to sell as soon as the news is announced? You then avoid the insider trading accusations (as the information is now public), but still avoid the bulk of the losses.

Re: Three Equifax Managers Sold Stock Before Cyber Hack Was Revealed

#68

Post by [deleted] »

wildmusings wrote: post #46
khuey wrote: post #42

Earlier quoted context omitted.

Intent doesn't need to be proven. If you knew of the material non-public information and you then decided to execute a trade you're guilty of insider trading.

It's not that clear cut. Otherwise, no one in the leadership of a company would ever be allowed to buy or sell stock.

[deleted]

Re: Three Equifax Managers Sold Stock Before Cyber Hack Was Revealed

#69

Post by devonkim »

nilved wrote: post #66
yen223 wrote: post #45

Earlier quoted context omitted.

"But my intuition about a thing and what the law says don't always match" I wish more people on this forum recognized this

Recognized that the law doesn't apply to rich people?

More like the law was written in cooperation with the people that became wealthy through means that used to be legal and protected themselves and their legacy by kicking away the ladders they used.

Re: Three Equifax Managers Sold Stock Before Cyber Hack Was Revealed

#70

Post by thephyber »

twblalock wrote: post #59
mankash666 wrote: post #15

Credit reporting agencies are the cancer of the modern economy. They are rife with inaccuracies, and on top of that, highly vulnerable to hacking , as software engineering is just a cost for them, not their focus. Their entire function needs to move to the blockchain. Their only value is that of a distributed, trust less ledger, and they charge horrible fees and sit in the middle for doing that terribly

If inaccurate information made its way into the blockchain, how could it be removed? At least credit agencies can remove inaccurate information from your report. They don't make it easy, but they can do it. In a blockchain, how would that be possible?

Just because something is immutable doesn't mean you can't amend an old record to flag it as inaccurate / irrelevant / outdated.

That said, I don't know how I feel about replacing credit bureaus with a distributed database. The issue still revolves around verifying identity and reputation. The blockchain doesn't solve identity. Perhaps it could solve the reputation problem... of a cryptocurrency wallet. How does a merchant know that their current customer doesn't just burn the reputation of a wallet and create another wallet?

I see BitCoin has being a masterful synergy of several existing algorithms and theories. But it's a lot like a 4-legged chair. I've yet to hear a great use of blockchain (other than a cryptocurrency) which supports the chair with all 4 legs. Some proposals would be better served as just a distributed database, others don't benefit at all from being distributed. Some simply don't have an incentive for miners to spend on the electricity needed for Proof of Work and will inevitably suffer from one company consolidating a majority of the network -- thereby compromising the value of the consensus algorithm.

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