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The crime of "insider trading" is a type of securities fraud. A plain reading of the law would not seem to apply to purchasing a home. But historically securiti

The crime of "insider trading" is a type of securities fraud. A plain reading of the law would not seem to apply to purchasing a home. But historically securities fraud has been used to prosecute a wide array of behavior

otterley 8y ago
Do you have any examples of such cases? I'd love to read the law on this.
- karmelapple 8y ago
  There was a great article from yesterday on securities fraud: https://news.ycombinator.com/item?id=18498796 https://news.ycombinator.com/item?id=18498796
  - otterley 8y ago
    I was looking for specific case law that could be used to argue that the behavior in question is unlawful, as the GP implied but did not support with facts or law. The article you cite does not provide references to such law either; in fact, it neither has the word "fraud" nor "insider" in it. This article was about bribery, particularly of foreign officials; and the prosecutions attempted by the SEC led to consent decrees, not new securities laws. (The FCPA, however, eventually did get passed by Congress to outlaw the practice; but that is not a securities law.) In fact, the article itself states: > Proxmire believed that although the SEC had done all it could under the disclosure program, what was really needed was a law specifically prohibiting foreign bribery. The existing laws were not sufficient, as they addressed only the means through which a bribe might be paid, but not the act of paying a bribe itself. So it's unfortunately not very helpful.
- gnopgnip 8y ago
  Matt Levine has some entertaining articles on insider trading allegations
munk-a 8y ago
I would be surprised if purchasing a mine for some particular mineral immediately after learning that your tech company will suddenly need an enormous amount of that mineral in a closed door meeting, didn't constitute some sort of insider trading. Similarly, if advanced real estate purposes were made with the intent of resale I'd imagine you'd also get hit with insider trading. I think it'd be pretty reasonable to prosecute them anyways since they are using insider knowledge of market movements to gain an edge in the real estate market.
- spyspy 8y ago
  Real estate as a whole needs newer and much stronger restrictions. It's an inarguable fact that it's a "housing market" and speculative investment tends to be bad for everyone.
- 1123581321 8y ago
  That’s a very broad and speculative reading. Insider trading is about regulating the securities market, not about keeping all transactions by the insider information-balanced.
  - sfifs 8y ago
    Or as Matt Levine says - it is about theft (ie trading on stolen information) not about fairness
- mlazos 8y ago
  For a historical example I’m pretty sure Disney did this with purchasing land in Orlando before they announced they would build Disney World there. They even used fake names. Given in that case the company itself was doing the purchasing in secret so that seems a bit less shady.
- mason55 8y ago
  > I would be surprised if purchasing a mine for some particular mineral immediately after learning that your tech company will suddenly need an enormous amount of that mineral in a closed door meeting, didn't constitute some sort of insider trading. Then prepare to be surprised > Similarly, if advanced real estate purposes were made with the intent of resale I'd imagine you'd also get hit with insider trading You'd imagine wrong > I think it'd be pretty reasonable to prosecute them anyways since they are using insider knowledge of market movements to gain an edge in the real estate market. That's not what insider trading is in the eyes of the law. Insider trading applies strictly to securities. Commodities markets have laws against front-running. But that's about it. If you take information that your company is going to suddenly need a new metal and you go buy all the mines then about all your company can do is fire you.

otterley 8y ago

Do you have any examples of such cases? I'd love to read the law on this.

karmelapple 8y ago
There was a great article from yesterday on securities fraud: https://news.ycombinator.com/item?id=18498796 https://news.ycombinator.com/item?id=18498796
- otterley 8y ago
  I was looking for specific case law that could be used to argue that the behavior in question is unlawful, as the GP implied but did not support with facts or law. The article you cite does not provide references to such law either; in fact, it neither has the word "fraud" nor "insider" in it. This article was about bribery, particularly of foreign officials; and the prosecutions attempted by the SEC led to consent decrees, not new securities laws. (The FCPA, however, eventually did get passed by Congress to outlaw the practice; but that is not a securities law.) In fact, the article itself states: > Proxmire believed that although the SEC had done all it could under the disclosure program, what was really needed was a law specifically prohibiting foreign bribery. The existing laws were not sufficient, as they addressed only the means through which a bribe might be paid, but not the act of paying a bribe itself. So it's unfortunately not very helpful.
gnopgnip 8y ago
Matt Levine has some entertaining articles on insider trading allegations

munk-a 8y ago

I would be surprised if purchasing a mine for some particular mineral immediately after learning that your tech company will suddenly need an enormous amount of that mineral in a closed door meeting, didn't constitute some sort of insider trading. Similarly, if advanced real estate purposes were made with the intent of resale I'd imagine you'd also get hit with insider trading. I think it'd be pretty reasonable to prosecute them anyways since they are using insider knowledge of market movements to gain an edge in the real estate market.

spyspy 8y ago
Real estate as a whole needs newer and much stronger restrictions. It's an inarguable fact that it's a "housing market" and speculative investment tends to be bad for everyone.
1123581321 8y ago
That’s a very broad and speculative reading. Insider trading is about regulating the securities market, not about keeping all transactions by the insider information-balanced.
- sfifs 8y ago
  Or as Matt Levine says - it is about theft (ie trading on stolen information) not about fairness
mlazos 8y ago
For a historical example I’m pretty sure Disney did this with purchasing land in Orlando before they announced they would build Disney World there. They even used fake names. Given in that case the company itself was doing the purchasing in secret so that seems a bit less shady.
mason55 8y ago
> I would be surprised if purchasing a mine for some particular mineral immediately after learning that your tech company will suddenly need an enormous amount of that mineral in a closed door meeting, didn't constitute some sort of insider trading. Then prepare to be surprised > Similarly, if advanced real estate purposes were made with the intent of resale I'd imagine you'd also get hit with insider trading You'd imagine wrong > I think it'd be pretty reasonable to prosecute them anyways since they are using insider knowledge of market movements to gain an edge in the real estate market. That's not what insider trading is in the eyes of the law. Insider trading applies strictly to securities. Commodities markets have laws against front-running. But that's about it. If you take information that your company is going to suddenly need a new metal and you go buy all the mines then about all your company can do is fire you.