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How do you measure what the profits from his illegal trading was? It's not like he ran this one strategy unchanged for years -- only some percentage of his orde
by consz 11y ago
How do you measure what the profits from his illegal trading was? It's not like he ran this one strategy unchanged for years -- only some percentage of his orders fall into non-bonafide.
- hawkice 11y agoGood point, but the idea with the fine isn't restitution, it's to create an honest-to-God disincentive for bad behavior. Zeroing out their ill-gotten gains merely teaches them not to be caught. If the fines are 20x, 100x or 1,000x the provably ill-gotten gains, it stops making sense to even try. It's also important to note: (1) the higher fines could be easily supported by the individual without him leaving the top tax bracket, and (2) the activities are illegal even if you don't make money off of them, so limiting it to a multiple of earnings is a bad/wrong framing.
- userbinator 11y agoIf the fines are 20x, 100x or 1,000x the provably ill-gotten gains, it stops making sense to even try. Depends on the probability of getting caught... remember that these traders are likely to be very experienced at assessing risk vs reward.
- hawkice 11y agoTrue -- you think we are catching less than 1/1,000 of these? There's that old saw about how it's impossible to know if people commit the perfect crime because, by definition, it involves us not knowing. That being said, a couple percent of people in the companies would object, I'd imagine (this assumes they aren't much worse than average).