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Six charged in Silicon Valley insider trading ring

sec.gov

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Re: Six charged in Silicon Valley insider trading ring

#31

Post by endisneigh »

kyleblarson wrote: post #29
endisneigh wrote: post #5

White collar crimes are barely punished - what a joke. Insider trading isn’t larceny, but for the sake of conversation let’s say it was - 1 million in insider trading would be like 4000 counts of grand larceny, each of which carry a max fine of 25K each. If people were actually fined 100 million for 1 million of insider trading I bet you it’d stop happening. For comparison $250 or more stolen is grand larceny and has…

Have you been to a Walgreens in SF lately?

No, but I know what you're referring to and that's a great example and is my point - see what happens when you don't punish people for clear criminal activity?

Re: Six charged in Silicon Valley insider trading ring

#32

Post by jb775 »

> Using sophisticated data analysis, the SEC was able to uncover this insider trading ring and hold each of its participants accountable

Anyone know details about the analysis they do? I'm assuming some sort of scan that notices when multiple people in the same geographic area and/or are publicly connected in some way (i.e. are fb friends) simultaneously place massive stock market orders on the same security.

Re: Six charged in Silicon Valley insider trading ring

#33

Post by u678u »

fny wrote: post #4

> Bannon agreed to pay a civil penalty of $281,497, Rauch agreed to pay a civil penalty of $128,230, and Ramaiya agreed to pay a civil penalty of $65,780. Sood also consented to the entry of a final judgment and agreed to pay a civil penalty of $178,320. So the SEC claims they found $1.7M in insider trading, and they only collect $700K. This assumes the ring didn't do more. No wonder bigger players do this in size. W…

I'm guessing the penalty is low because they're not professionals.

> No wonder bigger players do this in size. What a joke.

Not sure who you mean by that. SEC is all over every major player.

Re: Six charged in Silicon Valley insider trading ring

#34

Post by notsureaboutpg »

throwaway0a5e wrote: post #20
VWWHFSfQ wrote: post #11

Earlier quoted context omitted.

> designed to go after the smallest possible players SEC doesn't have infinite resources to go after every possible financial crime. They go after the ones that have the highest likelihood of successful prosecution. This is the case with most prosecutions like this.

That's called "revenue policing" and the only people who like it are the people high status enough to not be subject to it.

Whatever it's called doesn't matter. There's not a viable alternative. If you don't prosecute charges with substantial evidence, the risk of loss increases and eventually the department bleeds money at too large a degree and gets shut down causing no enforcement

Re: Six charged in Silicon Valley insider trading ring

#35

Post by JumpCrisscross »

fny wrote: post #4

> Bannon agreed to pay a civil penalty of $281,497, Rauch agreed to pay a civil penalty of $128,230, and Ramaiya agreed to pay a civil penalty of $65,780. Sood also consented to the entry of a final judgment and agreed to pay a civil penalty of $178,320. So the SEC claims they found $1.7M in insider trading, and they only collect $700K. This assumes the ring didn't do more. No wonder bigger players do this in size. W…

> the SEC claims they found $1.7M in insider trading, and they only collect $700K

Nothing has been collected. This is a complaint [1] being put to court demanding a jury trial. The § 21A civil monetary penalties are in addition to "further relief as the Court deems appropriate," which is legal speak for we don't know how to divvy up the gains just yet but want to put specific dollar fines in the complaint attached to each defendant. (The SEC doesn't put people in jail. The DoJ is conducting its criminal investigation, which takes more time for obvious reasons.)

There is a stark difference between financial professionals and laypeople in terms of how they judge the risk of getting caught for insider trading and the scale of the punishment that comes with it.

[1] https://www.sec.gov/litigation/complaints/2021/comp-pr2021-1...

Re: Six charged in Silicon Valley insider trading ring

#36

Post by mgkimsal »

WalterBright wrote: post #24
endisneigh wrote: post #5

White collar crimes are barely punished - what a joke. Insider trading isn’t larceny, but for the sake of conversation let’s say it was - 1 million in insider trading would be like 4000 counts of grand larceny, each of which carry a max fine of 25K each. If people were actually fined 100 million for 1 million of insider trading I bet you it’d stop happening. For comparison $250 or more stolen is grand larceny and has…

> I bet you it’d stop happening You'd lose that bet. The death penalty didn't stop pickpocketing, or any other crimes, for that matter. People just don't work like that. Constantly ratcheting up the penalties starts moving into medieval territory rather quickly.

> The death penalty didn't stop ...

Are you sure? How would you be sure? If there's even a few people who've come close to committing a crime, then considered the punishment (prison/execution), then decided against the crime... isn't that "stopping" it?

Re: Six charged in Silicon Valley insider trading ring

#37

Post by u678u »

endisneigh wrote: post #5

White collar crimes are barely punished - what a joke. Insider trading isn’t larceny, but for the sake of conversation let’s say it was - 1 million in insider trading would be like 4000 counts of grand larceny, each of which carry a max fine of 25K each. If people were actually fined 100 million for 1 million of insider trading I bet you it’d stop happening. For comparison $250 or more stolen is grand larceny and has…

There is no way a first time offender who steals $250 would get 5 years.

Re: Six charged in Silicon Valley insider trading ring

#38

Post by vmception »

fny wrote: post #4

> Bannon agreed to pay a civil penalty of $281,497, Rauch agreed to pay a civil penalty of $128,230, and Ramaiya agreed to pay a civil penalty of $65,780. Sood also consented to the entry of a final judgment and agreed to pay a civil penalty of $178,320. So the SEC claims they found $1.7M in insider trading, and they only collect $700K. This assumes the ring didn't do more. No wonder bigger players do this in size. W…

They avoided losses and only made some gains

SEC went after the new money

Re: Six charged in Silicon Valley insider trading ring

#39

Post by wpietri »

asah wrote: post #9

This is how the SEC spends its resources? This is considered newsworthy? $2M is considered material in 2021? If they'd been in charge of the WW2 military, instead of Omaha Beach, we'd have a press release about one random dead Nazi.

You seem to be implying this is the only thing they have done, which is odd.

I think they should go after big fish of course. But there's also value in going after the littler fish. You don't want people thinking they can get away with insider trading if they just keep their crimes under the big-fish threshold. After all, there are a lot more little fish out there, and most serious criminals have a long pattern of escalation. It's valuable to keep people off the path entirely.

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