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Six charged in Silicon Valley insider trading ring

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Re: Six charged in Silicon Valley insider trading ring

#131

Post by clipradiowallet »

realist2001 wrote: post #28
qqtt wrote: post #2

I'm not sure if this is standard for SEC press releases, but why do they include details such as, "he was a school teacher" and, "he owed gambling debts"? I've always suspected the SEC investigations regarding things like insider trading are typically the opposite of justice and designed to go after the smallest possible players while giving the illusion of enforcement. And these details in an allegedly serious inves…

>> why do they include details such as, "he was a school teacher" and, "he owed gambling debts"? They want to signal to larger players (hedge funds, etc) that enforcement is only on smaller players like high school teachers. They are signaling to their rich friends and power brokers in NYC/Connecticut that there is nothing to worry about w/r/t to the real, bigtime insider trading. This comment is meant to be both sar…

justice.gov and sec.gov are not just-the-facts style sites. They are meant to inform the public as well as vilify wrong-doers. Part of making sure their stories are picked up widely, is including those types of details to make the story more "interesting" to the masses.

Re: Six charged in Silicon Valley insider trading ring

#132

Post by clipradiowallet »

JumpCrisscross wrote: post #56
throwaway0a5e wrote: post #20

Earlier quoted context omitted.

That's called "revenue policing" and the only people who like it are the people high status enough to not be subject to it.

> the only people who like it are the people high status enough to not be subject to it Everyone at the SEC is keenly aware that bagging a high-ranking financier is a ticket to higher office.

> Everyone at the SEC is keenly aware that bagging a high-ranking financier is a ticket to higher office.

Just speculating here, but I imagine everyone at the SEC is also aware that going after someone with 9-figures-and-higher wealth may not be cut and dry. At those levels, the person you are going after can wreck your [and all your colleagues] lives in new and interesting ways that aren't apparent.

Re: Six charged in Silicon Valley insider trading ring

#133

Post by shard »

verbify wrote: post #89
jessaustin wrote: post #69

Earlier quoted context omitted.

Can we come up with an example of an SEC official building upon an investigation of a "high-ranking financier" in order to obtain high office?

Not SEC, but US attorney for the Southern District Preet Bharara apparently made his fame by going after Wall Street bigwigs. I don't know much about him besides his Wikipedia page (which could be edited by a PR firm), but it seems that was his career trajectory.

Another not-SEC example would be Eliot Spitzer who parlayed his policing of Wall Street corruption as the Attorney General of New York into a governorship.

Re: Six charged in Silicon Valley insider trading ring

#134

Post by throwaway789256 »

asah wrote: post #9

This is how the SEC spends its resources? This is considered newsworthy? $2M is considered material in 2021? If they'd been in charge of the WW2 military, instead of Omaha Beach, we'd have a press release about one random dead Nazi.

I agree with this. The SEC cracks down on amateur inside-traders, because the professionals no how to cover their tracks: they have the resources to fight it in court; and the smart ones hire the SEC staff via the revolving door.

This case is hilarious, and for that I applaud the SEC, but it's also theater.

Re: Six charged in Silicon Valley insider trading ring

#135

Post by haswell »

dheera wrote: post #112
aeternum wrote: post #109

Earlier quoted context omitted.

Quarterly earnings is pretty antiquated anyway. Perhaps public companies should just report continuous / daily earnings via automated accounting software. This should make it harder to hide accounting fraud and improve transparency and market fairness.

Perhaps. But why do we actually care about market fairness? I care that companies get shit done. I want to see electric cars, cancer cures, solar power, and vaccines. I don't care that the markets are fair. If an unfair market means I get those things faster I'm all for it. FWIW I get cheaper strawberries than most people because I'm good at bargaining. Markets aren't supposed to be fair, they're supposed to factor i…

> But why do we actually care about market fairness?

I'm having a hard time understanding why you believe this is even a question, but I'm trying...

Let me ask you a different question: should the CEO of a company who knows about a major upcoming change (positive or negative) be allowed to trade on that information? After all, based on your arguments so far "they should be rewarded for rising the the position of CEO".

Do you not see a fundamental issue with a system that guarantees unfairness? If I'm allowed to trade on insider info, and everyone else trading knows that, can you imagine the downstream consequences? e.g. every time I trade, the entire market will now react, because the very fact that I'm trading now might indicate something about the fundamentals of the stock.

> Markets aren't supposed to be fair, they're supposed to factor in these kind of soft skills.

What makes you believe/conclude this? Fairness in markets doesn't mean we all pay the same price, nor do "soft skills" really play into modern day stock trading.

Buying cheap strawberries is a cute analogy, but is an apples/oranges comparison, and one involves a consumable product, while the other involves buying a stake in a company based on information that's supposed to be available to everyone else interested in buying a stake in the company.

You may not believe fairness is needed, but that doesn't change that those are the rules we operate under, and most participants in the stock market would fundamentally disagree with you.

Re: Six charged in Silicon Valley insider trading ring

#136

Post by fallingknife »

dcolkitt wrote: post #80
endisneigh wrote: post #5

White collar crimes are barely punished - what a joke. Insider trading isn’t larceny, but for the sake of conversation let’s say it was - 1 million in insider trading would be like 4000 counts of grand larceny, each of which carry a max fine of 25K each. If people were actually fined 100 million for 1 million of insider trading I bet you it’d stop happening. For comparison $250 or more stolen is grand larceny and has…

But insider trading isn’t comparable to larceny whatsoever. There is no definitive victim. Yes, in some sense the market is “less fair”. But the purpose of insider trading law isn’t to create a level playing field. It’s perfectly legal for a well-funded hedge fund to fly helicopters over an oil refinery with infrared cameras, so they can know ahead before a public announcement how much revenue the company is doing. R…

Given that markets are supposed to be information aggregators, it would actually be fairer if insider trading was allowed. Of course, as with all things, the profit would be much less if it were.

Re: Six charged in Silicon Valley insider trading ring

#137

Post by fallingknife »

elliekelly wrote: post #21
tw600040 wrote: post #13

For anything worth securing we have security engineered into it, like passwords, encryption what not. But for insider trading we are just supposed to assume that the players play right without any checks or balances? I don't think just the SEC is sufficient to prevent this.

I was on a call last week about the SEC’s changing priorities under Chairperson Gensler and the consensus among all of the attorneys on the call was that they will be more data-driven and have already been using data analytics far more extensively than ever before. I suspect the case in the linked release came about from those efforts: > “Using sophisticated data analysis, the SEC was able to uncover this insider tra…

As you can see from the details here, they hardly needed "sophisticated analysis:"

https://www.bloomberg.com/opinion/articles/2021-06-16/don-t-...

Re: Six charged in Silicon Valley insider trading ring

#139

Post by version_five »

byset wrote: post #104
jessaustin wrote: post #69

Earlier quoted context omitted.

Can we come up with an example of an SEC official building upon an investigation of a "high-ranking financier" in order to obtain high office?

SEC pursued junk bond pioneer Michael Milken in the 1980s, Ivan Boesky before that… unsure of specifics of SEC personnel getting to “high office” because of that but seems obvious that high profile successful prosecutions would be career-making (Granted those examples are from the 80s but i would think there are more recent examples…) Milken was prosecuted by Rudy Giuliani which didn’t hurt Giuliani’s career, but Rud…

Milken's prosecution didnt really hurt his career much either. Hes still a billionaire (and if I remember right, his brother did very well too).

PS - read Den of Thieves again - there is an imo strong parallel between what was going on with junk bonds in the 80s and what is happening now with VC money. When Milken was indicted, he couldn't keep all the balls in the air anymore and the whole thing fell apart. I'm very interested to see what parallel will play out this time and when.

Re: Six charged in Silicon Valley insider trading ring

#140

Post by tayloramurphy »

mdoms wrote: post #95
wp381640 wrote: post #12

> Nathaniel Brown, [..] repeatedly tipped Infinera’s unannounced quarterly earnings and financial performance to his best friend, Benjamin Wylam > Wylam, [..] and also tipped Naveen Sood > Sood allegedly traded on this information and tipped his three friends Marcus Bannon, Matthew Rauch, and Naresh Ramaiya It's less a ring and more a tree One of the issues with leaking the info - you have no control over what is don…

There's an incredibly good 7-part podcast on the Australian case you're talking about, if anyone's interested. It's called The Sure Thing. https://www.afr.com/podcast/the-sure-thing

Thank you for sharing this! I'm going to add it to my listening queue.
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