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Twilio employees, associates charged with insider trading by SEC

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271–280 of 302 posts

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

#271

Earlier quoted context omitted.

Economists aren't a monolith. Legalizing insider trading does nothing for fairness. The SEC does catch insider trading. And yes, they could do better. Your morals are showing. Just because you can justify it doesn't make it so for most.

So, you don’t actually have an argument to make? > Legalizing insider trading does nothing for fairness But it does, it increases information available to the public.

I don't have an argument. You don't need to argue to contribute. My contribution was pointing out persuasive writing devices often used to add credibility to one’s argument but are not supported by any logic or reasoning in his comment.

> But it does, it increases information available to the public.

A little less pedantically for those who enjoy repetition and are prone to dogma, more information is not always better. In this case, as is in general, there should be some qualitative analysis, e.g., the type of information, how it was gathered, its method of distribution,...etc.

On another note, the Efficient Market Hypothesis (EMH) is not reality. I say this because you have used several core tenets in your discourse repeatedly. I acknowledge the high probability that I am most likely dealing with a college student fresh out of introductory Macro. Yes, the class is interesting and exciting. Here is a lesson, EMH is a model used to help us reason about the market. Its an abstraction based on an abundance of simplifying assumptions, ceteris paribus. Anybody who does not disabuse themself of this notion that EMH follows reality is a fine and perfectly capable person who may make a lot of money some day (fingers crossed), but they don't really add much to the conversation.

Finally, unrelated to the aforementioned, yet I don’t care to answer any more of your responses to my posts, so I’ll add this here: look up the ‘straw man fallacy.’ I tend to shy away from using biases and fallacies in general discussion, they seem to miss more than they hit. However, my distaste doesn’t stem from those who use them effectively to facilitate when they hold relevance. No, my distaste comes from those who use them as the argument itself. It is lazy and adds nothing to of value, much like allowing insider trading. If you can explain what makes my example of financial auditors' a 'straw man', especially when it was solicited by a general question asking for examples, then you can claim you 'dominated the conversation' / won or whatever this is.

https://en.wikipedia.org/wiki/Straw_man - here is a link, figure it out.

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

#272
post #220

Earlier quoted context omitted.

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 grea…

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

Insider trading is not like other crimes.

Consider the reasons why it is criminalized, which have been discussed elsewhere under this post.

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

#273
post #57

I work in billing software for a publicly traded software company and this is a constant temptation. I'm never gonna do it because I'm not gonna blow up my career for a relative pittance, but I can't tell you how many times I've been annoyed that I couldn't act on private information and make ~$100k or so. These guys are like the kids who saw the Tide Pod challenges and decided to actually eat the pods. I bet insider…

>I bet insider trading is not as fun when you're unemployed and bankrupt. Not just unemployed, likely unemployable by any reputable company in the industry. Also, good on you for having integrity, but honestly what you say is too much for the average person to be tempted with. Does anyone have a solution for lowering that temptation and making these scenarios less likely?

> too much for the average person to be tempted with

The average person is basically a decent human being, so this is absolutely fine. It's the outliers that are the problem.

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

#275

Earlier quoted context omitted.

> Also, Congress has 532 people, so by statistical certainty we should expect some to beat the market. Congress has many individuals that consistently beat the market by significant margins over a prolonged period of time, far past the point of reasonable arguments that you can make based on statistics.

Congress may outperform in the aggregate, but this is not enough to prove that they illegally traded. There are other possible explanations.

What explanations do you suggest?

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

#276

I work in billing software for a publicly traded software company and this is a constant temptation. I'm never gonna do it because I'm not gonna blow up my career for a relative pittance, but I can't tell you how many times I've been annoyed that I couldn't act on private information and make ~$100k or so. These guys are like the kids who saw the Tide Pod challenges and decided to actually eat the pods. I bet insider…

What you're proposing is not insider trading but is likely prohibited contractually, if you tell your buddy to do it and in some way benefit...now you're in trouble.

But capitalising on insider knowledge is generally okay from the SEC's perspective.

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

#277

Earlier quoted context omitted.

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.

Most of the time these stories are reported, there is no indication that the motivation is paying back medical debts. Actually I've never seen it. It's normally gambling or drugs. I agree an insider with medical debt is a theoretical problem, but it doesn't seem to be an actually common occurrence.

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

#278
post #36

Earlier quoted context omitted.

My wife owns a small retail clothing store. It is her experience that the people who attempt to steal, are not generally lower income, they are often among the most well-to-do members of the population that goes through her store. Very different stakes, and very different age group (she mostly sells to teenagers and twentysomethings), but same psychology, I think. "I'm not the sort of person who gets arrested and sen…

I call this the "National Park effect". Being constantly coddled in some way dulls your ability to recognize when circumstances have changed, and those safeguards are no longer present. See: tourists who wander off in National Parks with no cell service, with no water or survival gear, and then think it's a good idea to pet a bison The concept of laying bleeding, miles from the nearest road, with broken bones, as nig…

There's also the "cynicism effect".

If you believe "everyone does it" -- Congress, billionaire X, the C-suite at every company -- it becomes a lot easier to justify you doing it yourself. You're not doing anything wrong, everyone does it.

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

#279

Earlier 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.

Interesting, hadn't heard of that one before. With some digging this appears to be the first case where they have ever charged someone for "shadow trading" like this. And it is still making its way through the courts. Definitely will be following that.

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

#280

Earlier quoted context omitted.

Congress may outperform in the aggregate, but this is not enough to prove that they illegally traded. There are other possible explanations.

What explanations do you suggest?

Being new congress members have given them ample free time to learn financial theories and market strategies from MIT OpenCourseware
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