Husband of Amazon employee sentenced to prison for insider trading Amazon stock • Hacker News Board

Re: Husband of Amazon employee sentenced to prison for insider trading Amazon stock

#131

Post by seanmcdirmid » Fri, Jun 11, 2021, 5:13 AM UTC

JumpCrisscross wrote: post #101

leephillips wrote: post #59

Stories like this boggle my mind. How do such people think that they are going to get away with this? If I were going to try something like this I would at least make some attempt to obfuscate my activities; trading through proxies, mixing in losing trades, something.

> How do such people think that they are going to get away with this? Many Americans think insider trading is l common than. If everyone is getting away with 70 mph, you can too. (Exhibit A: this thread.) In reality, insider trading enforcement is effective. The SEC looks for unusually profitable trades ex post facto . Their verification is easier than the insider trading. Wall Street doesn’t insider trade because it…

Were they even American?

I've heard more than a few stories of immigrants coming the states, working tech jobs, and ... getting thrown in jail for insider trading because their stock market worked very very very differently back home. It has gotten so bad that many of the big techs include mandatory training on what inside trading is and how not to do it.

Re: Husband of Amazon employee sentenced to prison for insider trading Amazon stock

#132

Post by nradov » Fri, Jun 11, 2021, 5:13 AM UTC

zeta0134 wrote: post #117

whymauri wrote: post #112

Earlier quoted context omitted.

>Millions of investors do that with no problems. Err, example please? I'm totally blanking here, not gonna lie.

Err, wouldn't most of these millions be employees of the company, who receive stock options as a benefit or a bonus?

Some employees get options. Others get grants or ESPP discounts.

Re: Husband of Amazon employee sentenced to prison for insider trading Amazon stock

#133

Post by Uberphallus » Fri, Jun 11, 2021, 5:14 AM UTC

whymauri wrote: post #112

nradov wrote: post #37

Earlier quoted context omitted.

There's nothing illegal about trading your employer's stock if you don't have access to insider information. Millions of investors do that with no problems.

>Millions of investors do that with no problems. Err, example please? I'm totally blanking here, not gonna lie.

You and your family doing your trades out of blackout periods, mainly. You can buy products or receive them as comp without problem.

Re: Husband of Amazon employee sentenced to prison for insider trading Amazon stock

#134

Post by _y5hn » Fri, Jun 11, 2021, 5:16 AM UTC

ashtonkem wrote: post #107

ocdtrekkie wrote: post #99

Earlier quoted context omitted.

That's heavily assuming Congresspeople are successful at investing. Assuming insider trading is still illegal for Congresspeople, you will have a hard time picking between "people not insider trading, good at picking stocks though", "people not insider trading, bad at picking stocks", "people who are insider trading, and actually good at it", and "people who are insider trading, but still make terrible choices". Good…

Most traders suck at trading, if a congress person with no financial history starts beating the market, I’d bet a lot that they’re cheating.

If they're shorting or just holding for a short time it's trading. Otherwise long-term positions are investments.

Re: Husband of Amazon employee sentenced to prison for insider trading Amazon stock

#135

Post by havocsupreme » Fri, Jun 11, 2021, 5:20 AM UTC

I'll be honest, the title of the announcement made by the justice department looks like a news article title written by journalists and not by a government office. I have nothing against journalists or attorneys, the subject just doesn't look right.

Re: Husband of Amazon employee sentenced to prison for insider trading Amazon stock

#136

Post by nradov » Fri, Jun 11, 2021, 5:21 AM UTC

dheera wrote: post #66

nradov wrote: post #37

Earlier quoted context omitted.

There's nothing illegal about trading your employer's stock if you don't have access to insider information. Millions of investors do that with no problems.

Even if you do have access to insider information it should be (in my opinion) still legal to trade the stock. There should instead be restrictions on the time for an order to go through, not on the act of insider trading.

Insiders are allowed to trade, however there are time limits. Plans to buy or sell must be disclosed well in advance and black out periods can apply.

Re: Husband of Amazon employee sentenced to prison for insider trading Amazon stock

#137

Post by lizdax » Fri, Jun 11, 2021, 5:21 AM UTC

nradov wrote: post #37

lizdax wrote: post #2

>he obtained from his wife, an Amazon finance employee, to place trades in Amazon stock–making a profit of $1,428,264 >Bohra engaged in illegal insider trading in advance of 11 straight earnings announcements.” >He and his family members have paid $2,652,899 in disgorgement, interest and penalties. And 26 months in prison! This is why if you're going to do any kind of trading yourself -- never touch the company you w…

There's nothing illegal about trading your employer's stock if you don't have access to insider information. Millions of investors do that with no problems.

Adding a note, according to the initial filings from the SEC:

>As further explained in Amazon’s Insider Trading FAQs, “puts, calls, warrants and other types of option securities” were required to “be cleared in advance with the Legal Department, regardless of whether that employee is otherwise subject to preclearance or to the trading window, even if that employee is not in possession of material nonpublic information.”

Amazon employees require Amazon's Legal approval before trading Amazon options.

page 6, #17-21

Re: Husband of Amazon employee sentenced to prison for insider trading Amazon stock

#138

Post by unishark » Fri, Jun 11, 2021, 5:23 AM UTC

refurb wrote: post #40

nradov wrote: post #37

Earlier quoted context omitted.

There's nothing illegal about trading your employer's stock if you don't have access to insider information. Millions of investors do that with no problems.

Plenty of employers have company-wide blackouts for any stock trade in advance of earnings. So even if you don't have access to inside information you may be subject to company policies that prohibit it.

Yeah it's lame. Also they might prohibit shorting of the stock (always), preventing employees from locking in their stock option gains.

Re: Husband of Amazon employee sentenced to prison for insider trading Amazon stock

#139

Post by lordnacho » Fri, Jun 11, 2021, 5:25 AM UTC

10x-dev wrote: post #71

Having worked at Amazon, I know the employees are fully aware of blackout periods. There is no way to claim plausible deniability there. It is easier for clueless household members to get a hold of the earnings statement or unknowingly trade AMZN during blackout periods, so in some cases I can see how an honest mistake could happen. However, this guy traded 1.5M 11 times during blackout periods ahead of earning state…

I think people simply don't appreciate that it's an easily caught crime. Most illegal things that one might do won't ever be caught, eg you break into someone's house and it would take the police to bother investigating and then put enough effort into that one case. Or to stay in white collar you might forget to report some income, how's the tax man to know unless you are already in focus?

With insider trading the investigation is a DB query. It costs very little to look at all the trades for everyone around announcements and see who was acting suspiciously.

Re: Husband of Amazon employee sentenced to prison for insider trading Amazon stock

#140

Post by viraptor » Fri, Jun 11, 2021, 5:25 AM UTC

ycombobreaker wrote: post #74

ALittleLight wrote: post #12

Earlier quoted context omitted.

May be they would have to risk a trial to convict both but he would plea guilty to protect his wife. If the state believes he was the most responsible then they may judge a guaranteed conviction without the cost of trial to be worth it. The wife (and family) lost 2.6 million, plus her job, and the husband - so it's not like she got away with something, just avoided the worst of the punishment.

disgorged 2.6 million, that means just losing the ill-gotten gains. It's not fair to call that "lost".

If they kept the $2.6M in a liquid saving account just for cases like this one, yeah, that wouldn't be so bad. But I don't expect that's the case and in practice that could mean for example losing her house.