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Insider trade on Splunk acquisition?

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Re: Insider trade on Splunk acquisition?

#251

Post by drexlspivey »

vkou wrote: post #57
xyzelement wrote: post #17

I don't know if this is genuinely suspicious or not. Is buying 20K of options an unusual thing? Or is this something that happens regularly with options expiring worthless or with a small gain - and it just happened to hit big this time? IE "someone bought a lottery ticket and won" - interesting to know if they play the lottery every other day (and don't usually win?)

Buying 20k of options when there's a 99.99% chance of them being worth $0 is pretty unusual, unless you're actively regularly trading in the millions.

It’s a pretty common occurrence in r/wallstreetbets

Re: Insider trade on Splunk acquisition?

#254

Post by [deleted] »

kypro wrote: post #120

I know this isn't what happened, but what if one day I'm waiting for the bus and I over hear a guy talking on their phone about an imminent acquisition? 1. Would that still fall under insider trading even if the information was accidentally heard, and even if I wasn't 100% sure of its accuracy? 2. If I had no clear connection to the company how would it be proven that I was trading on insider information? Surely it's…

[deleted]

Re: Insider trade on Splunk acquisition?

#256

Post by kolbe »

mrb wrote: post #173

The screenshots demonstrate the trader purchased only $1,040 worth of options, not "$22,000" as claimed in the tweet. So the trader turned $1k into $475k. See the first photo in the tweet, the top left chart (45-day volume on the SPLK 127 C 09/22/2023 options) shows a volume of about 260 options was bought. The second photo confirms a volume of 260 (see "volume" column, first row). Options are for 100 shares. So 260…

This is correct. I can independently verify that there are a total of 420 contracts of open interest, and this tweet is fake news.

Re: Insider trade on Splunk acquisition?

#257

Post by burkaman »

sakex wrote: post #226
ar_lan wrote: post #204

Earlier quoted context omitted.

Disclaimer: not financial advice I don't think so, it happened publicly, you weren't privvy to classified details. I would go for it if I were in that scenario.

If it's legal, it means that somebody could write a model that could predict mergers pretty accurately and make a lot of money. For instance, by tracking flight patterns of C-suites executives, scanning car brands in parkings next to offices using satellite images, and analysing working hours of the staff (this can be done in multiple ways like sending e-mails to check of automated OOO responses or analysing the ligh…

You can buy the flight data right from Nasdaq if you want to: https://data.nasdaq.com/alternative-data/corporate-aviation-...

But if it's that easy that means other people are already doing it and you probably can't make any money.

Plenty of companies will help you monitor parking lots too: https://orbitalinsight.com/geospatial-solutions/financial-se..., https://rsmetrics.com/asset-tracker/

The general term for this stuff is "alternative data".

Re: Insider trade on Splunk acquisition?

#258

Post by snowwrestler »

bragr wrote: post #163
mock-possum wrote: post #153

Earlier quoted context omitted.

A guy speaking out loud at a bus stop isn’t public information?

The SEC has very specific rules and even specific form [1] they must file when companies release information like this. [1] https://www.sec.gov/forms

Those rules regulate the company, not random people at a bus stop.

Re: Insider trade on Splunk acquisition?

#259

Post by jabroni_salad »

hash872 wrote: post #154
kasey_junk wrote: post #133

Earlier quoted context omitted.

The SEC has recently been pursuing very expansive insider trading definitions, and they are occasionally losing, so it’s very hard to say. But traditionally in the US insider trading is not about market fairness, it’s about not stealing from shareholders. So if you have no obligation to the company or it’s shareholders you aren’t an insider. The phrase is “breach of a fiduciary duty or other relationship of trust and…

But I'm pretty sure I read a case of a guy who traded on a future acquisition and was convicted on insider trading charges. He surreptitiously overheard it from his fiance, who worked for the company. Doesn't this guy not owe a company he doesn't work for a fiduciary duty....?

As a someone in scope of FINRA, yes actually. Your immediate nuclear family owes your company that duty and you have to grant your company's watchdog the ability to monitor your family member's investments for restricted trades.

See also: I am not allowed to use robinhood at all because their referral program can reward you with a restricted security. Nobody was grandfathered and every RH user at my firm was told to xfer out or find a new job. I also can't use any roboadvisor.

For us peons, independence is a serious matter. It's just the rich and powerful that get to flaunt it.

Re: Insider trade on Splunk acquisition?

#260

Post by kevinmchugh »

compsciphd wrote: post #244
andylynch wrote: post #220

Earlier quoted context omitted.

Caveat that other jurisdictions do take a broader view (from memory, France is one that comes to mind where overhearing something confidential and trading on it is unlawful).

I believe the SEC went after capital one analysts who used information capital one has via credit card usages at stores to trade against companies not capital one. While one might say that the info that capital one had was proprietary (as they deffinitely use it for other things), its hard to view it ast hurting people one has a fiduciary duty to, but I believe they still won the conviction.

Were the analysts acting independently or on behalf of capital one? Because on its face it's capital one's information to trade with (other laws not withstanding)
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