SEC charges former Amazon finance manager and family with insider trading
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Re: SEC charges former Amazon finance manager and family with insider trading
#2How did the SEC figure this out? Do they monitor the accounts of all financial employees' relatives?
Re: SEC charges former Amazon finance manager and family with insider trading
#3How did the SEC figure this out? Do they monitor the accounts of all financial employees' relatives?
The complaint [1] includes quotes from the brokerage and from Amazon. Possibly either Amazon or the brokerage flagged this.
[1] https://www.sec.gov/litigation/complaints/2020/comp-pr2020-2...
Re: SEC charges former Amazon finance manager and family with insider trading
#4That's pocket change compared to some of the other things going on out there the SEC does not even investigate.
Re: SEC charges former Amazon finance manager and family with insider trading
#5How did the SEC figure this out? Do they monitor the accounts of all financial employees' relatives?
Re: SEC, Brokerages ask if you’re related to an officer/director/10%+ owner of a publicly-traded company when you open an account. I don’t think they actively monitor these people, but they’ll be looked at if there’s unusual trading activity.
Usually what happens in these cases is accounts with no/little activity suddenly have unusual options trading activity, like buying way OTM weekly calls that always profit. These transactions get flagged and reviewed and if they notice a pattern with names or something, it’s not that hard for them to put the pieces together.
Re: SEC charges former Amazon finance manager and family with insider trading
#6Too bad Matt Levine is out, I'm sure he would have a good time talking about just how terrible an idea this was. I assume these fools went with the classic "buy a shit ton of illiquid and thinly traded OTM options" route.
Re: SEC charges former Amazon finance manager and family with insider trading
#71.4M in profits? Doesn't that seem like chump change? Like if you had insider information couldn't you buy options a make much more? Assuming your info was guaranteed to play out predictably. And if it wasn't is it really any better than general speculation?
Re: SEC charges former Amazon finance manager and family with insider trading
#8As alleged, the family reaped illicit profits of approximately $1.4 million from their unlawful trading in Amazon securities.
Did anyone really need insider information to know Amazon stock was going to rise?
Although $1.4 million is life changing amount of money, I feel like for these people who were already being generously compensated in Amazon stock, it probably wasn't worth the risk, especially given the quote below.
Laksha Bohra, the SEC’s civil complaint alleged, ignored numerous reminders from Amazon not to divulge confidential financial information or to illegally trade in the company’s securities based on what she knew about the company’s financial position — even after a former colleague pleaded guilty to insider trading in 2017, earning him six months in prison. [1]
[1] https://www.seattletimes.com/business/amazon/feds-charge-sea...
Re: SEC charges former Amazon finance manager and family with insider trading
#9That's pocket change compared to some of the other things going on out there the SEC does not even investigate.
Thanks for your input.
Re: SEC charges former Amazon finance manager and family with insider trading
#10It is funny that high management is never considered to be doing illegal insider trading (except for obvious missteps), but they're the ones responsible for capital allocation, stock/option grants, and all kinds of decisions that will impact financial results in the next quarter.