How often is jail time included in these types of cases? If they merely lost their profits, this isn't much of a punishment.
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
#221.4M 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?
People do really dumb things for relatively small amounts of money. Look up examples of corruption in US city administrators. You’ll see people who throw away their career over $30k.
What you don’t see are all the other shady things they did. How often do people get caught the first time?
Re: SEC charges former Amazon finance manager and family with insider trading
#23As 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 b…
> Did anyone really need insider information to know Amazon stock was going to rise? Did you invest? Did everyone you know invest? Did you time it as well as the alleged offender?
Did I invest? Yes, my compensation was in part Amazon stock. Pretty much everyone I knew also invested. What is timing if you don't plan to sell short term? As far as I can tell, this charge is about buying not selling stock.
Re: SEC charges former Amazon finance manager and family with insider trading
#24How did the SEC figure this out? Do they monitor the accounts of all financial employees' relatives?
I'm guessing they look for accounts that suddenly start making a series of extremely profitable short term investments in a particular stock, then notice a bunch of linked accounts (having a history of transfers between each other) also suddenly making the same series of extremely profitable trades and only profitable trades. That's a red flag. After raising that red flag it wouldn't take a rocket scientist to notice the other linked account in the set that has made zero trades but receives a regular monthly paycheck direct deposit from the company in question.
Most people only try to commit major fraud once, and hence aren't very experienced at doing it. The IRS and SEC encounter major fraud constantly, and hence are very experienced at spotting it.
Scale favors the regulator when it comes to automated detection tools.
Re: SEC charges former Amazon finance manager and family with insider trading
#25As 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 b…
If it really is widely known that a stock will definitely rise at some point in the future, that very quickly gets priced into the stock price now. It goes up gradually as confidence that it will go up goes up.
And looking at AMZN stock price it has risen consistently since IPO.
Yall take things waayyy too seriously to not understand the humour in stating the obvious of Amazon's stock price though.
Re: SEC charges former Amazon finance manager and family with insider trading
#26> On January 15, 2018, Bohra used her work computer to search Google for “AMZN.”
How does the SEC know this? Is it most likely browser history? Google account history? Corporate monitoring software?
Re: SEC charges former Amazon finance manager and family with insider trading
#27How often is jail time included in these types of cases? If they merely lost their profits, this isn't much of a punishment.
The article mentions that they were asked to pay just under twice their profit (2 * $1.4 million)
Re: SEC charges former Amazon finance manager and family with insider trading
#28> On January 15, 2018, Bohra used her work computer to search Google for “AMZN.” How does the SEC know this? Is it most likely browser history? Google account history? Corporate monitoring software?
Amazon probably had to comply with giving up the corporate monitoring data most likely.
Re: SEC charges former Amazon finance manager and family with insider trading
#29How often is jail time included in these types of cases? If they merely lost their profits, this isn't much of a punishment.
There's also the $118,406 in interest, and $1,106,399 in penalties.
Re: SEC charges former Amazon finance manager and family with insider trading
#30It 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.
And their trades are typically scheduled in advance and public. Their job and fiduciary duty is to maximize shareholder value, and they make decisions so that happens. If that means allocating $ and rewarding people that will attain that goal, then what should be considered illegal?
There is an obvious conflict of interest between the long term stability of the business and the actions necessary for the huge stock/options grants become profitable in the next few quarters. For example, when mergers and acquisitions should be approved, layoffs be announced, dividends increased, etc.