5 ms·

This might be true if you work at a professional brokerage or hedge fund, but there's no way the SEC can investigate everyone holding a few million worth of TSL

This might be true if you work at a professional brokerage or hedge fund, but there's no way the SEC can investigate everyone holding a few million worth of TSLA options. Someone who buys a few million in puts just before hacking twitter is indistinguishable from some random robinhood user who decides it's time to go all in on puts because of a wsb post.

pcwalton 6y ago
People in this thread are seriously underestimating the competence of the authorities in dealing with financial crimes. Virtually everything people are suggesting here is something law enforcement has seen a thousand times before. Lots of people have had the idea that the SEC/FBI/etc. can never catch them. Right up until they go to prison.
- toephu2 6y ago
  > People in this thread are seriously underestimating the competence of the authorities in dealing with financial crimes. Any stats/evidence to backup your claim?
- Judgmentality 6y ago
  So you're saying insider trading is a well understood and highly prosecuted crime? I'd love to believe that, but I'm wildly skeptical that financial crimes (including insider trading) aren't incredibly pervasive in our society. In fact, I'd bet good money the overwhelming majority of people get away with it - of course there's no way to prove that because nobody wants to fess up to a crime they got away with.
  - AndrewBissell 6y ago
    When they're motivated to turn the eye of Sauron toward you the Feds can be very hard to evade. This can happen in a lot of ways. Whether you got a tip from a family friend or you knew what trades to make in advance of some fake rumors on Twitter (because you planted them), if you turn $5,000 into $250,000 with some perfectly timed options trades around a news event in an individual stock you will show up on their radar. Of course, insider trading among well connected hedge fund managers and our unaccountable financial elite is indeed pervasive and goes by without being prosecuted all the time, but it's fair to assume yesterday's hackers aren't in this protected class.
    - ZachPruckowski 6y ago
      >Of course, insider trading among well connected hedge fund managers and our unaccountable financial elite is indeed pervasive and goes by without being prosecuted all the time And a lot of those non-prosecutions involve either (a) civil fines, (b) the compliance department censuring or firing the relevant employee, or (c) the Feds backing down from a fight with a big white shoe defense firm. None of that applies to these Twitter hackers.
  - MaximumYComb 6y ago
    I'd bet it's just like drink driving. A significant minority do it despite the heavy penalities it brings. I don't know about women but I'd wager between 10-25% of men drink drive semi-regularly.
penagwin 6y ago
Wait do you mean they bought millions of dollars worth of put options or they bought put options they then sold for millions of dollars? Because anyone could just buy a crap load of $0.10 options marked a week out, wait a few days, then tank the stock. It would look like you got stupidly lucky, I have no clue how anyone could connect that to the twitter event directly. Especially since it’s not like you’ll be the only one that “won the lottery”. (Tesla isn’t a great stock for doing this though because their IV is so high that the premiums are crazy expensive)
- pcwalton 6y ago
  > It would look like you got stupidly lucky Precisely why you would be caught.
  - aeternum 6y ago
    https://ns.reddit.com/r/wallstreetbets/comments/how6us/1m_in_tsla_call_gains/ https://ns.reddit.com/r/wallstreetbets/comments/how6us/1m_in... So you would investigate this poster for insider trading? There are thousands of posts like this each week.
    - pcwalton 6y ago
      Search Google for "fbi insider trading press release". Every one of those people thought nobody would find out. They were wrong.
      - penagwin 6y ago
        Have you met r/wallstreetbets? While this certainly wouldn't be true for most people, many "day traders" make exactly these kinds of option plays that are in many cases literally just luck. There's many thriving communities around public market information before it's seen by the "mainstream". For these people buying $10,000 out of the money contracts on a random ticker is completely normal and still legal. So tipping somebody like that off would certainly hard to correlate.
    - deleted 6y ago

pcwalton 6y ago

People in this thread are seriously underestimating the competence of the authorities in dealing with financial crimes. Virtually everything people are suggesting here is something law enforcement has seen a thousand times before. Lots of people have had the idea that the SEC/FBI/etc. can never catch them. Right up until they go to prison.

toephu2 6y ago
> People in this thread are seriously underestimating the competence of the authorities in dealing with financial crimes. Any stats/evidence to backup your claim?
Judgmentality 6y ago
So you're saying insider trading is a well understood and highly prosecuted crime? I'd love to believe that, but I'm wildly skeptical that financial crimes (including insider trading) aren't incredibly pervasive in our society. In fact, I'd bet good money the overwhelming majority of people get away with it - of course there's no way to prove that because nobody wants to fess up to a crime they got away with.
- AndrewBissell 6y ago
  When they're motivated to turn the eye of Sauron toward you the Feds can be very hard to evade. This can happen in a lot of ways. Whether you got a tip from a family friend or you knew what trades to make in advance of some fake rumors on Twitter (because you planted them), if you turn $5,000 into $250,000 with some perfectly timed options trades around a news event in an individual stock you will show up on their radar. Of course, insider trading among well connected hedge fund managers and our unaccountable financial elite is indeed pervasive and goes by without being prosecuted all the time, but it's fair to assume yesterday's hackers aren't in this protected class.
  - ZachPruckowski 6y ago
    >Of course, insider trading among well connected hedge fund managers and our unaccountable financial elite is indeed pervasive and goes by without being prosecuted all the time And a lot of those non-prosecutions involve either (a) civil fines, (b) the compliance department censuring or firing the relevant employee, or (c) the Feds backing down from a fight with a big white shoe defense firm. None of that applies to these Twitter hackers.
- MaximumYComb 6y ago
  I'd bet it's just like drink driving. A significant minority do it despite the heavy penalities it brings. I don't know about women but I'd wager between 10-25% of men drink drive semi-regularly.

penagwin 6y ago

Wait do you mean they bought millions of dollars worth of put options or they bought put options they then sold for millions of dollars? Because anyone could just buy a crap load of $0.10 options marked a week out, wait a few days, then tank the stock. It would look like you got stupidly lucky, I have no clue how anyone could connect that to the twitter event directly. Especially since it’s not like you’ll be the only one that “won the lottery”. (Tesla isn’t a great stock for doing this though because their IV is so high that the premiums are crazy expensive)

pcwalton 6y ago
> It would look like you got stupidly lucky Precisely why you would be caught.
- aeternum 6y ago
  https://ns.reddit.com/r/wallstreetbets/comments/how6us/1m_in_tsla_call_gains/ https://ns.reddit.com/r/wallstreetbets/comments/how6us/1m_in... So you would investigate this poster for insider trading? There are thousands of posts like this each week.
  - pcwalton 6y ago
    Search Google for "fbi insider trading press release". Every one of those people thought nobody would find out. They were wrong.
    - penagwin 6y ago
      Have you met r/wallstreetbets? While this certainly wouldn't be true for most people, many "day traders" make exactly these kinds of option plays that are in many cases literally just luck. There's many thriving communities around public market information before it's seen by the "mainstream". For these people buying $10,000 out of the money contracts on a random ticker is completely normal and still legal. So tipping somebody like that off would certainly hard to correlate.
  - deleted 6y ago