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Twilio employees, associates charged with insider trading by SEC

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Re: Twilio employees, associates charged with insider trading by SEC

#221

Post by mgraczyk »

syshum wrote: post #210
mgraczyk wrote: post #28

Earlier quoted context omitted.

All the specific allegations that I looked into were absolutely not insider trading. The heavily scrutinized Pelosi trades, for example, were pre-planned rolling of options that did not generate profits directly and would have been executed very differently if the trader had any foreknowledge of future price movements in the underlying. People often sell and buy options at different expiry dates to keep their positio…

ahh yes, the classic "we investigated ourselves and found we did nothing wrong" Sorry if I do not trust their investigation

I'm not a member of Congress

Re: Twilio employees, associates charged with insider trading by SEC

#222

Post by otterley »

economist6373 wrote: post #147
woodruffw wrote: post #143

Earlier quoted context omitted.

I think it would be dishonest to do so actively, which is why I try to acknowledge that the SEC's current ability to enforce insider trading laws is relatively weak and ineffective. I think it's my civic duty to not only inform others of that fact, but also to advocate for better enforcement.

Good enforcement is impossible. You can never meaningfully hinder insider trading, far too many people have access to insider information. They don’t have to make the trades themselves either. > I think it would be dishonest to do so actively That is what the government is doing via legislation.

By that logic, we should never pass any laws because we can't perfectly enforce them.

Re: Twilio employees, associates charged with insider trading by SEC

#223

Post by otterley »

deObfuscate wrote: post #136
rosndo wrote: post #108

Earlier quoted context omitted.

This implies a truly bizarre understanding of markets and fairness. Was it fair when Enron was valued at $70B? Would the situation have been less fair had insider traders with more information pushed the prices down earlier? Insider trading doesn’t cost anybody anything, it simply allows for more accurate pricing which benefits everybody.

So, if I were a trader at Enron who made good money trading electricity and gas then used that money to short the stock based on private information, I'd be doing everyone a service and fighting for fairness. Better yet, I could be one of their auditors at Arthur Andersen.

Oh, please. You wouldn't be doing everyone a "service" because you'd be making money (or at least losing less) than the other investors - you'd have a material advantage. If you truly wanted to do the world a service, you would have just publicized their fraud and taken a bath along with everyone else.

Re: Twilio employees, associates charged with insider trading by SEC

#224

Post by shipofthesys »

nojito wrote: post #125
tempsy wrote: post #19

Earlier quoted context omitted.

isn’t this what they use Palantir for?

Nope. https://www.sec.gov/marketstructure/midas-system

Weird seeing MIDAS referenced on HN. Always seemed like a minor thing from the inside at Thesys.

Also, don’t forgot the notorious CAT project.

https://www.finra.org/rules-guidance/key-topics/consolidated...

Re: Twilio employees, associates charged with insider trading by SEC

#225

Post by antihero »

JumpCrisscross wrote: post #182
rosndo wrote: post #54

Earlier quoted context omitted.

> These guys are like the kids who saw the Tide Pod challenges and decided to actually eat the pods. I bet insider trading is not as fun when you're unemployed and bankrupt. Most insider traders are never caught, everyone eating tide pods gets sick.

> Most insider traders are never caught Executing an inside trade profitably and secretly is difficult. Catching it ex post facto is easy. (The SEC scans for unusually profitable trades and accounts. These systems are thorough, clever and effective. When they're updated, they re-run back data through the statute of limitations.) This is the P != NP element of insider trading that outsiders miss. It's why inside trade…

I mean, for the people in this case it seemed like that they communicated that they relied on the database access in writing somewhere that was the issue.

Surely if they, by (supposed) conjecture, figured that the company might do better if people are more dependent on phone calls in lockdown (a reasonable assumption), and there was no evidence to the contrary, how from a technical basis would it look any different from someone simply going "oh yeah my company looks like it's gonna do great, I'd recommend getting some shares"?

I wonder if this investigation would have had teeth if it had relied on coffee shop conversations as opposed to digital media.

Re: Twilio employees, associates charged with insider trading by SEC

#227

Post by paulpauper »

rosndo wrote: post #220
paulpauper wrote: post #172

Earlier quoted context omitted.

they almost always get caught. The SEC is so good at detecting this stuff especially when people do it many times thinking they got away with it the first few times. .

Can you find any sources to support this claim? It is easy to find sources claiming the opposite. And no, it’s really difficult for SEC to detect any but the most basic forms of insider trading. Try to apply some adversarial thinking and envision a situation where you want to insider trade, but don’t want to get caught.

I have seen cases where people get caught even after using many middlemen/intermediaries involving seemingly multiple unrelated contacts, breaking the trades up into tiny batches, using encrypted chat services, making normal trades and trying to mix the illicit trades in.

>Try to apply some adversarial thinking and envision a situation where you want to insider trade, but don’t want to get caught.

Criminals take great efforts to not be caught and still are.

Re: Twilio employees, associates charged with insider trading by SEC

#228

Post by harry8 »

joering2 wrote: post #189
harry8 wrote: post #184

Earlier quoted context omitted.

Sure but Pelosi, Feinstein etc etc are so very very clever they'd have become multi-millionaires by them & their partners investing in the market if they didn't regulate those companies. /s

Case of Pelosi comes so often but she is a very weak example. Came from $300,000,000 family fortune "her" stock picks (she obviously doesn't pick herself but has financial firm representing and making moves on her behalf) did merely $6,000,000 in last 10 years, according to her tax statements. I don't get why her "inside trading" and her fridge full of ice-cream triggers so many people; people who clearly haven't don…

Because her husband is the person making their trades? That seems pretty far from "weak" to me.

https://www.businessinsider.com/nancy-pelosi-discloses-stock...

Re: Twilio employees, associates charged with insider trading by SEC

#229

Post by [deleted] »

temp_praneshp wrote: post #206
elwell wrote: post #204

If the employees were receiving (vesting) a standard monthly amount of RSUs for compensation, normally selling immediately upon vesting, and decided to wait a couple months based on inside information about company performance that they were just naturally exposed to during their work, would that be considered insider trading? I assume it would. Hmm... it's kind of scary how easy it would be to inside trade without r…

> would that be considered insider trading Not by default. Typically, according to the trainings I have received, over and over again, it's only wrong to trade if you are exposed to material non public information (MNPI). Such a person would have to know they are in a special category, unless they live under a rock or something. I think it's ridiculously difficult for an employee receiving a standard monthly amount o…

[deleted]

Re: Twilio employees, associates charged with insider trading by SEC

#230

Post by eklitzke »

corentin88 wrote: post #110
runako wrote: post #9

I'm sure the SEC has an array of tools with which to comb through the data, but I would bet that the vast majority of these cases against non-professional traders are flagged by identifying retail brokerage accounts where the notional value of options outstanding is 1) larger than some % of the the portfolio size (e.g. > 50%) 2) with exposure concentrated on 1-3 stocks 3) with no similarly-sized follow-up trades in o…

It’s more likely to me that they talked about it internally (to colleagues?) and someone reported it to HR, the police or SEC directly.

It could also have been the case that they were just bragging to friends or people at bars/parties about it, but either way I agree that it's much more likely that someone heard about it and then tipped off the SEC.
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