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DOJ: Hackers broke into an SEC database and made millions from inside info

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Re: DOJ: Hackers broke into an SEC database and made millions from inside info

#131

Post by JumpCrisscross »

ben509 wrote: post #119
JumpCrisscross wrote: post #29

Earlier quoted context omitted.

> if that were the case, it would be legal for a company director to trade on information they gleaned from an internal meeting That’s theft of company (read: shareholders’) information by a fiduciary. Remember: America has no statute barring insider trading. The rules were developed through case law. (There’s a hypothetical of “if a company insider shouts material nonpublic information on the street and you trade on…

The 1933 Securities Act, 1934 Securities Exchange Act and the Sarbanes-Oxley Act of 2002 all directly address insider trading.

In very limited ways. For example, the 33 Act bans short-swing trading and certain specific activity by holders of more than 10% of a stock. The vast majority of insider trading enforcement is brought forth on securities antifraud and fiduciary obligation statute interpreted through extensive case law.

Re: DOJ: Hackers broke into an SEC database and made millions from inside info

#132

Post by axlee »

jgust wrote: post #100
briffle wrote: post #59

Earlier quoted context omitted.

that is what wtvanhest is talking about. If everyone has your social, its no longer considered a secret (like a password) its more like a unique identifier (an email address) just like it was intended to be.

When you think about it that way & then combine it with some type of 2FA, it starts to make a lot of sense.

That's how it works in Sweden.

Re: DOJ: Hackers broke into an SEC database and made millions from inside info

#135

Post by zorga »

all_blue_chucks wrote: post #102
wildmusings wrote: post #79

Earlier quoted context omitted.

It's worth noting that trading spikes in advance of public availability of news doesn't necessarily imply illegal activity. Overheard conversations between strangers, for example, are fair game.

> Overheard conversations between strangers, for example, are fair game. Wrong. It's insider trading if you have material, nonpublic information. It doesn't matter how you got that information.

Absolutely not.

> It doesn't matter how you got that information.

Yes it does, if I didn't do anything illegal to acquire it, and I have no obligation to the company, I can use it legally, I'm not an insider.

Re: DOJ: Hackers broke into an SEC database and made millions from inside info

#136

Post by throwawaymath »

ben509 wrote: post #119
JumpCrisscross wrote: post #29

Earlier quoted context omitted.

> if that were the case, it would be legal for a company director to trade on information they gleaned from an internal meeting That’s theft of company (read: shareholders’) information by a fiduciary. Remember: America has no statute barring insider trading. The rules were developed through case law. (There’s a hypothetical of “if a company insider shouts material nonpublic information on the street and you trade on…

The 1933 Securities Act, 1934 Securities Exchange Act and the Sarbanes-Oxley Act of 2002 all directly address insider trading.

No, they all address illegal insider trading. If all forms of legitimate trading on material nonpublic information were illegal, then information asymmetry in the market would be outlawed. That would make it impossible to legally profit using any kind of financial research.

Re: DOJ: Hackers broke into an SEC database and made millions from inside info

#137

Post by zorga »

AznHisoka wrote: post #99
ghayes wrote: post #94

Earlier quoted context omitted.

Matt Levine discussed this topic in Money Stuff today: https://www.bloomberg.com/opinion/articles/2019-01-16/even-c... Long-story short is that it's not always obvious how the market will react to releases. Some of the hackers only traded with a ~70% win-rate after holding the releases.

70% is still very very high. They didnt make billions because they probably started with little capital.

70% is extremely high, you can easily get rich with a 51% advantage and making enough small bets to invoke the law of large numbers.

Re: DOJ: Hackers broke into an SEC database and made millions from inside info

#138

Post by throwawaymath »

crumpets wrote: post #75
rocqua wrote: post #13

Earlier quoted context omitted.

Insider trading is a balance. On the one hand, we want market prices to be accurate. This means we want people with material information to trade on that information. On the other hand, we need some fairness in a market. This is mostly to ensure people keep trading. In a world were inside-info is commonplace, trading without it is just stupid. This would cut off a lot of people from investing. The line needs to be dr…

>This is mostly to ensure people keep trading. In a world were inside-info is commonplace, trading without it is just stupid. I find this line of reasoning hard to swallow. As an individual I have significantly less info than hedge funds and other professionals but that doesn't change the fact that I want to buy Apple or whatever because I think it will grow over the next 5 years. Now if you add in the scenario where…

Tim Cook (and all other Apple employees) are legally disallowed from buying or selling Apple stock outside of specific, well-defined trading windows. In particular, they cannot legally benefit from unpublished earnings information.

Re: DOJ: Hackers broke into an SEC database and made millions from inside info

#139

Post by zorga »

quickthrower2 wrote: post #65
airstrike wrote: post #49

Earlier quoted context omitted.

Because markets are built upon the assumption that time is discrete, not continuous.

But.. is it continuous?

In theory yes (Einstein) though we know this theory is wrong at the small scale so in reality probably not given what we know of quantum mechanics.

Re: DOJ: Hackers broke into an SEC database and made millions from inside info

#140

Post by starpilot »

btbuildem wrote: post #76

People make money off advance information all the time. Often you can see that in the price action -- take this for example: https://imgur.com/mJq1OcY Three days before a positive press release, demand pressure beings to drive up the price. Coincidence? I'm too jaded to believe that.

It's been pretty well established that insider trading is and has been rampant: https://www.cnbc.com/2018/02/14/insider-trading-is-still-ram...
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