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DOJ: Hackers broke into an SEC database and made millions from inside info
21–30 of 198 posts
Re: DOJ: Hackers broke into an SEC database and made millions from inside info
#22This isn't hard to believe if you've worked w/ the Edgar system!
Re: DOJ: Hackers broke into an SEC database and made millions from inside info
#23Earlier quoted context omitted.
Insider trading is a balance. On the one hand, we want market prices to be accurate. This means we want people with material information to trade on that information. On the other hand, we need some fairness in a market. This is mostly to ensure people keep trading. In a world were inside-info is commonplace, trading without it is just stupid. This would cut off a lot of people from investing. The line needs to be dr…
> On the other hand, we need some fairness in a market American insider trading law has nothing to do with fairness. It is based on theft of information. In this case, the hacker’s stole information from the SEC that belonged to the reporting companies. (This is a commonly misunderstood alley of securities law.)
if that were the case, it would be legal for a company director to trade on information they gleaned from an internal meeting. Which, as far as I understand, it isn't.
Re: DOJ: Hackers broke into an SEC database and made millions from inside info
#24I'm more curious about how they hacked into the SEC database? Did they use an email trojan? Exploit an existing flaw or backdoor? If they did this via e-mail, who did they send the mail to?
The good old email trojan continues to be all you need.
Re: DOJ: Hackers broke into an SEC database and made millions from inside info
#25> The New York Stock Exchange has asked the SEC to consider limiting the amount of data collected by the CAT, which would include data on around 58 billion daily trades, as well as the personal details of individuals making the trades, including their Social Security numbers and dates of birth Dropping SSNs for natural persons would be a good idea.
IMO, everyone's SSN should be public. Mine has already be compromised by both my undergrad and grad school. At this point, I operate under the assumption that it is public knowledge for bad actors.
Hiding SSNs is false security at best. If they were public, banks would stop hiding behind "identity theft" and would start having to acknowledge that its their responsibility to confirm who they are lending money to.
Re: DOJ: Hackers broke into an SEC database and made millions from inside info
#26Earlier quoted context omitted.
Yes - so they're not released while the markets are open.
Just curious -- why does that matter? In either case there's a single moment wherein people can trade on it. Why is it better for that moment to be at 9:30 instead of say noon?
In 2012 Google's 8K earnings filing was accidentally released 3 hours early. https://www.businessinsider.com/google-blames-rr-donnelley-f... Their stocked tanked 10% before trading was halted
Re: DOJ: Hackers broke into an SEC database and made millions from inside info
#27Earlier quoted context omitted.
Just curious -- why does that matter? In either case there's a single moment wherein people can trade on it. Why is it better for that moment to be at 9:30 instead of say noon?
Because they need time to correct errors and to prevent fraud. Say someone gets into the SEC and decides to release a fraudulent report. If that happens during off hours it can be rectified, but if it happens during the trading day the markets will react instantly and the damage is done. Fixed release times also means that the companies submitting the filings cannot pick an advantageous time. Imagine if Musk was sitt…
>but if it happens during the trading day the markets will react instantly and the damage is done.
Sounds like a good hacker movie.
Re: DOJ: Hackers broke into an SEC database and made millions from inside info
#28Earlier quoted context omitted.
> On the other hand, we need some fairness in a market American insider trading law has nothing to do with fairness. It is based on theft of information. In this case, the hacker’s stole information from the SEC that belonged to the reporting companies. (This is a commonly misunderstood alley of securities law.)
if that were the case, it would be legal for a company director to trade on information they gleaned from an internal meeting. Which, as far as I understand, it isn't.
That’s theft from the corporation they work for. GP is 100% correct in this case. Just read Matt Levine’s Money Stuff. He goes over this stuff a lot.
Re: DOJ: Hackers broke into an SEC database and made millions from inside info
#29Earlier quoted context omitted.
> On the other hand, we need some fairness in a market American insider trading law has nothing to do with fairness. It is based on theft of information. In this case, the hacker’s stole information from the SEC that belonged to the reporting companies. (This is a commonly misunderstood alley of securities law.)
if that were the case, it would be legal for a company director to trade on information they gleaned from an internal meeting. Which, as far as I understand, it isn't.
> if that were the case, it would be legal for a company director to trade on information they gleaned from an internal meeting
That’s theft of company (read: shareholders’) information by a fiduciary.
Remember: America has no statute barring insider trading. The rules were developed through case law. (There’s a hypothetical of “if a company insider shouts material nonpublic information on the street and you trade on it, is that insider trading” that lawyers love to opine on, but to my understanding that’s never come up in court.)
This is a common misunderstanding with respect to insider trading.
Re: DOJ: Hackers broke into an SEC database and made millions from inside info
#30Earlier quoted context omitted.
Just curious -- why does that matter? In either case there's a single moment wherein people can trade on it. Why is it better for that moment to be at 9:30 instead of say noon?
In 2012 Google's 8K earnings filing was accidentally released 3 hours early. https://www.businessinsider.com/google-blames-rr-donnelley-f... Their stocked tanked 10% before trading was halted
But it was an earnings filing in which they did not meet expectations - this strongly suggests that the stock would have tanked anyway, regardless of timing.