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What Happens When a Fifteen Year Old Pumps and Dumps with a Net Profit of $800k? (2002)

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Re: What Happens When a Fifteen Year Old Pumps and Dumps with a Net Profit of $800k? (2002)

#111

Post by AnthonyMouse »

dataflow wrote: post #108
AnthonyMouse wrote: post #104

Earlier quoted context omitted.

> failing to mention that your posts are with the hope of raising the price because you have a vested interest in that... seems like a material omission, if nothing else. And if you run around telling people that you just bought some of the stock you think is going to the moon, is that supposed to make them less inclined to buy it, or do they now just think you're putting your money where your mouth is? > what matter…

I don't have the energy to dissect all this, but you're completely conflating legality, enforcement, and provability. We have juries for a reason. Most would a priori find it hard to believe that someone who found a winning strategy would repeatedly post it on random message boards with altruistic intent.

Juries need some basis on which to make a decision. The law is ridiculous if it only turns on whether you had a lawyer ahead of time to tell you what not to say while operating the identical scam.

It's not clear why telling people you think a stock is going to go up after you've already bought it would require altruism, and more than that you would benefit by building a reputation as someone who makes accurate predictions if you turn out to be right, independent of whether anyone acts on your statement by buying the stock.

Re: What Happens When a Fifteen Year Old Pumps and Dumps with a Net Profit of $800k? (2002)

#112

Post by gnfargbl »

dataflow wrote: post #62

> The messages that Lebed posted would predict marked increases in the stocks value [...] In response to Lebed’s messages, trading volume of these stocks would soar I'm so confused reading the comments here. How in the world is anyone defending this?

I'm equally confused, but in the other direction!

He was acting without any special knowledge, so the only thing he was taking advantage of was the gullibility of the general public. That's usually legal, no?

Re: What Happens When a Fifteen Year Old Pumps and Dumps with a Net Profit of $800k? (2002)

#113

Post by toss1 »

dataflow wrote: post #108
AnthonyMouse wrote: post #104

Earlier quoted context omitted.

> failing to mention that your posts are with the hope of raising the price because you have a vested interest in that... seems like a material omission, if nothing else. And if you run around telling people that you just bought some of the stock you think is going to the moon, is that supposed to make them less inclined to buy it, or do they now just think you're putting your money where your mouth is? > what matter…

I don't have the energy to dissect all this, but you're completely conflating legality, enforcement, and provability. We have juries for a reason. Most would a priori find it hard to believe that someone who found a winning strategy would repeatedly post it on random message boards with altruistic intent.

yup, especially if they are not including the standard: "Disclosure: I have positions in this security."

This could be interpreted as (and/or variously written to indicate) "this person is just talking up his/her book" or "they like it so much they have skin in the game".

Plus the factor of how much noise there is to any signal in the social media & message boards, how much attention can one reliably actually get for your shilling?

Wrong vs provably wrong are often different

Re: What Happens When a Fifteen Year Old Pumps and Dumps with a Net Profit of $800k? (2002)

#114

Post by __MatrixMan__ »

AnthonyMouse wrote: post #97
__MatrixMan__ wrote: post #86

Earlier quoted context omitted.

Money gets created when people take out loans which creates debt which is then traded in the markets. That's not money flowing into the markets, that's just the markets doing their own internal bookkeeping (much like D&D uses HP for internal bookkeeping about character health). If you want to convincingly argue that markets are positive sum you have to demonstrate that markets produce more than they consume in terms…

In general there are two ways for companies to make money. 1) They make something that otherwise wouldn't have been made, or make it more efficiently than the competition and then capture volume with lower prices. 2) Rent seeking; they extract higher profits from the same activity, e.g. by buying their competitors and raising prices. Traders do the work of finding the companies that can do one of these things and all…

I'd argue for a third category where the new thing addresses a problem that the company themselves is making more problematic (e.g. TurboTax) or where "more efficiently" involves cases where costs to the company are exchanged for costs to society (e.g. petroleum companies, cambridge analytica).

I think this category represents the majority of economic activity today, which is why I'm skeptical of markets being zero sum.

The result is the same though: find was to get more of (1) and less of (2) and (3).

Re: What Happens When a Fifteen Year Old Pumps and Dumps with a Net Profit of $800k? (2002)

#115

Post by joncrocks »

AnthonyMouse wrote: post #104
dataflow wrote: post #101

Earlier quoted context omitted.

> Whether this is fraud or not basically hinges on whether you were being intentionally dishonest, right? No. Do you mean legally? or morally? Legally the offenses include things beyond what might strictly be "fraud" (see "fraud or deceit" as one example, but there are more [1]). IANAL, but failing to mention that your posts are with the hope of raising the price because you have a vested interest in that... seems li…

> failing to mention that your posts are with the hope of raising the price because you have a vested interest in that... seems like a material omission, if nothing else. And if you run around telling people that you just bought some of the stock you think is going to the moon, is that supposed to make them less inclined to buy it, or do they now just think you're putting your money where your mouth is? > what matter…

The rabbit hole is deeper than you think.

https://en.wikipedia.org/wiki/Mens_rea

FWIW, there are other examples of where securities laws where intent (which is difficult to prove) is needed in order to demonstrate a law has been broken. e.g. Spoofing.

Re: What Happens When a Fifteen Year Old Pumps and Dumps with a Net Profit of $800k? (2002)

#116

Post by IncreasePosts »

d0gsg0w00f wrote: post #85
dehrmann wrote: post #40

Earlier quoted context omitted.

> So you trick people by lying to them, and it's ok because you take their money indirectly via the stock market No one was arguing that it was indirect; the people who lost money took advice from an anonymous user on a forum on tiny companies they'd never heard of. The morality question is still interesting because it hinges on whether or not people knew they were playing a game with deception.

These situations always remind me of a quote from Clark Howard who was a radio host of personal finance shows. "It's almost impossible to get scammed if you're not a greedy person"

"Can't con an honest john"

Re: What Happens When a Fifteen Year Old Pumps and Dumps with a Net Profit of $800k? (2002)

#117

Post by AnthonyMouse »

__MatrixMan__ wrote: post #114
AnthonyMouse wrote: post #97

Earlier quoted context omitted.

In general there are two ways for companies to make money. 1) They make something that otherwise wouldn't have been made, or make it more efficiently than the competition and then capture volume with lower prices. 2) Rent seeking; they extract higher profits from the same activity, e.g. by buying their competitors and raising prices. Traders do the work of finding the companies that can do one of these things and all…

I'd argue for a third category where the new thing addresses a problem that the company themselves is making more problematic (e.g. TurboTax) or where "more efficiently" involves cases where costs to the company are exchanged for costs to society (e.g. petroleum companies, cambridge analytica). I think this category represents the majority of economic activity today, which is why I'm skeptical of markets being zero s…

The third thing is just the second thing. TurboTax lobbying to avoid free tax filing is obviously rent-seeking. It might even be more accurate to call this category rent seeking through regulatory capture. Fossil fuels would have been trounced by nuclear except that they lobbied to require nuclear to internalize all of its costs (and then some) but not their own, extracting undue rents by handicapping the competition.

The closest you get to a third category is Cambridge Analytica, in which case the third category would be criminal enterprises. But these rarely remain listed on the stock market; you won't find shares of the Guadalajara Cartel at your brokerage. It's the companies in the second category that do, because they're doing things that should be illegal but aren't.

Re: What Happens When a Fifteen Year Old Pumps and Dumps with a Net Profit of $800k? (2002)

#118

Post by Supermancho »

gmd63 wrote: post #26
EGreg wrote: post #13

Earlier quoted context omitted.

The entire trading industry is a zero-sum game bro. For someone to win someone else has to lose. As is the advertising industry and surveillance capitalism industry that powers the “free web”. (Only at the edges is new value created. Most of it exists to have large institutionals take money from the small newbs, you’re the fish at the poker table.) And more broadly, capitalism exploits people. This is like blaming An…

Incorrect. Capitalism allows economies to accelerate the birth of new companies that benefit people. When it's policed and regulated poorly, yes, scammers can proliferate. So don't vote for politicians who lie without apology, and don't let people you don't trust manage your money or provide you with goods or services. Predatory people will exist with or without capitalism, only Capitalism is fine-grained democracy w…

> only Capitalism is fine-grained democracy where you vote literally every day with your dollar.

I'm not sure where you get that from. Every economic model has trading, wherein the participants make trades (goods for goods). Capitalism is not democratic. Communism isn't democratic for a similar reason. The pareto principle (and natural hierarchies) appears and equality goes out the window for the traders.

Re: What Happens When a Fifteen Year Old Pumps and Dumps with a Net Profit of $800k? (2002)

#119

Post by AnthonyMouse »

joncrocks wrote: post #115
AnthonyMouse wrote: post #104

Earlier quoted context omitted.

> failing to mention that your posts are with the hope of raising the price because you have a vested interest in that... seems like a material omission, if nothing else. And if you run around telling people that you just bought some of the stock you think is going to the moon, is that supposed to make them less inclined to buy it, or do they now just think you're putting your money where your mouth is? > what matter…

The rabbit hole is deeper than you think. https://en.wikipedia.org/wiki/Mens_rea FWIW, there are other examples of where securities laws where intent (which is difficult to prove) is needed in order to demonstrate a law has been broken. e.g. Spoofing.

Intent is often not that difficult to prove. It isn't murder if you were just sitting in the bell tower innocently cleaning your sniper rifle and it accidentally went off and put a round through the head of your sworn enemy, but you're entitled to reasonable doubt, not preposterous fabrications.

The problem here is that the innocent behavior and the prohibited one are basically identical and neither of them is particularly implausible.

Re: What Happens When a Fifteen Year Old Pumps and Dumps with a Net Profit of $800k? (2002)

#120

Post by backtoyoujim »

hunter2_ wrote: post #63
fmajid wrote: post #47

> Depending on who you talk to, Lebed was either viewed as a person who knowingly abused the system and broke the law, or someone who acted no differently than Wall Street analysts acted Both of these statements can be true at the same time.

> Depending on who you talk to, Lebed was either viewed as a person who knowingly abused the system and broke the law, or someone ... actually performing no wrong-doing. Funny how selectively quoting a bit differently makes that appear far less so.

https://www.youtube.com/watch?v=XIh44OEyQgc

Cramer admits to doing basically an insider version of "flood finance.yahoo.com with bs" as his job

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