These guys deleted their LinkedIn.what a shame.
Twilio employees, associates charged with insider trading by SEC
251–260 of 302 posts
Re: Twilio employees, associates charged with insider trading by SEC
#252This seems surprisingly far down the list of what SEC's priorities should be. A million dollar fraud when there are almost certainly billion dollar frauds ongoing. One theory for going after small fish is that fraudsters often start small and get bigger and more sophisticated (and harder to catch). Therefore, it's good to nail them early and signal to other junior fraudsters that they're not underneath the radar. It'…
Presumably someone tipped the SEC about this, so they just had to go and verify the trades and then ask Twilio for chat logs. The report actually mentions exactly which SEC employees led the investigation, and it wasn't a huge team.
They’re probably bragging on social media. Sucks for them.
Re: Twilio employees, associates charged with insider trading by SEC
#253Earlier quoted context omitted.
> From a cultural standpoint, many people do not trade on insider information because it is seen as unfair or immoral Is it immoral to trade on material nonpublic information you happened to overhear in a restaurant?
I would argue that: yes, it is immoral. Is it likely for you to get caught for insider trading? Probably not. Especially if you're Joe Blow and you make 10k on this. If you are Joe Blow making 10k also means you did not have a lot of "play money" to act upon overhearing some random conversation. Or you do but didn't trust it fully (how did you know it was 'material' and not just some guys at a business lunch 'boastin…
Not immoral in the slightest.
Re: Twilio employees, associates charged with insider trading by SEC
#254Earlier quoted context omitted.
> well, for one, members of congress are legally allowed to insider trade. Are they? Highlight link: https://en.wikipedia.org/wiki/STOCK_Act#:~:text=The%20law%20... .
Spoiler: members of Congress are not allowed to trade on inside information. We haven't yet seen a prosecution, however.
Why go after congress members making millions when you can go after software engineers making thousands?
Re: Twilio employees, associates charged with insider trading by SEC
#255Earlier quoted context omitted.
1. Find out using inside information that Twilio is having a good quarter due to macro conditions 2. Buy deep OTM call options in… a similar company that’s in the same business as Twilio 3. Never get in any trouble
But that's not insider trading. You don't have inside information on that other company. You have a guess that their business is doing similar. When perhaps Twilio is doing so well because they took business from that competitor or something else that makes them stand out.
https://www.sec.gov/news/press-release/2021-155
You absolutely can get charged for trading in a similar company.
Re: Twilio employees, associates charged with insider trading by SEC
#256Earlier quoted context omitted.
Yea, now just imagine how many smarter people are doing it and getting away with it
Not many? Describe the trade steps necessary to insider trade with high leverage that isn’t trivial for a data analytics program to flag with high confidence?
I don't find it hard to imagine.
1. Work for a company that provides signal-giving infrastructure for a variety of companies across disparate industries. Twilio is actually a perfect example.
2. Find someone to work with that already has or is willing to build a plausible history of so-so trades.
3. Occasionally tip this person off that company Y in industry X is about to have a good quarter. Never trade the same company twice. Parallel construct a plausible rationale for the trade based on public market signals if you want to sleep well at night.
4. Don't communicate over easily subpoenaed channels, obviously. The SEC isn't the NSA, basic OPSEC is fine.
5. Profit?
That's why I'm so disappointed by the OP! It's so easy to dream up a situation where they used their access in an effectively untraceable way.
Re: Twilio employees, associates charged with insider trading by SEC
#257Earlier quoted context omitted.
But that's not insider trading. You don't have inside information on that other company. You have a guess that their business is doing similar. When perhaps Twilio is doing so well because they took business from that competitor or something else that makes them stand out.
https://www.sec.gov/news/press-release/2021-155 You absolutely can get charged for trading in a similar company.
This is another situation where I am literally dumbfounded at the actions of the indicted. How are you smart enough to know what options are and how to buy them but stupid enough to think that you won't get caught making such a blatant trade?
It's like these people think they're the first ones to ever come up with the idea of trading on privileged information so there's no way they'll get caught.
Re: Twilio employees, associates charged with insider trading by SEC
#258Earlier quoted context omitted.
> but honestly what you say is too much for the average person to be tempted with. I think you underestimate the “average person”. Most people basically want to be good. Everything works better when that is the case — basic game theory. You see the punishment / pressure about unfairness start in early childhood. You see it in the infrastructure where this is overwhelmingly the case (e.g. shops with unguarded back ent…
people want to be good but debt and financial problems can negatively impact judgement. people take risks when they are desperate. I’m sure it happens all the time, we just heard about the ones who got caught. Personally I would never do it as I can make much more by keeping my job and the field I’m in is all about ethics and integrity. I would rather hustle with contracting or job shop to get a raise if I really nee…
People who are in an insider position at a publicly traded company are generally getting compensated well enough that they do not need any more. They may want more but most folks get by with much less.
Re: Twilio employees, associates charged with insider trading by SEC
#259Earlier quoted context omitted.
This is not at all in line with research on the field. > It's why inside traders are usually unsophisticated Insider traders who get caught are usually unsophisticated.
There is a huge survival bias here: the ones we know who did it are unsophisticated about it so were easy to catch. The ones we suspect might be doing it are sophisticated enough that there is no evidence of their wrong doing. Maybe they aren't doing it, or maybe they are just good at doing it.
One of the ways hedge funds do, or used to, do is this strategy: trade a ticker very regularly (every other day, or thrice a week), then get the insider info, make the profit in that week. Then buy and sell. A month later, move on to another ticker.
Re: Twilio employees, associates charged with insider trading by SEC
#260Earlier quoted context omitted.
people want to be good but debt and financial problems can negatively impact judgement. people take risks when they are desperate. I’m sure it happens all the time, we just heard about the ones who got caught. Personally I would never do it as I can make much more by keeping my job and the field I’m in is all about ethics and integrity. I would rather hustle with contracting or job shop to get a raise if I really nee…
People who are in an insider position at a publicly traded company are generally getting compensated well enough that they do not need any more. They may want more but most folks get by with much less.
In the US, all it takes is a run in with the legal system or emergency medical bills, and virtually anyone could find themselves in dire financial straights.