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If they knew up front they would be doing this, they could’ve shorted Tesla in smaller positions, over multiple accounts. There’s tons of people shorting Tesla,

If they knew up front they would be doing this, they could’ve shorted Tesla in smaller positions, over multiple accounts. There’s tons of people shorting Tesla, would it really be traceable to any of those?

vkou 6y ago
Yes, because the SEC isn't stupid, and would trawl through the data, until they found: * A set of freshly opened accounts. * That only shorted a single stock. * Right before a major hack. * That cashed out all at once. * That never traded again. And then they'd start calling the owners of those accounts, and asking questions. Most of those accounts would be legitimate traders, but that's fine - there's not that many accounts that satisfy four of those five criteria. A few sql queries can narrow it down to the point that basic detective work can solve the rest. The problem with playing stupid games on the stock market is that there's a very clear paper trail that will link you, as a human being, to the money that you're hoping to make. At least with bitcoin, you can theoretically isolate yourself from the source of the funds, through tumblers, transferring money in and out of shady exchanges, etc. This is also exactly how the SEC catches insider-traders. By analyzing the flow of trades, and following up on suspicious ones. If the first and only trade you've ever done in your life is a $200,000 short[1] on your employer twenty minutes before a disastrous earnings, you might soon be talking to a very nicely dressed man who would love to get another conviction under his belt. [1] If you think you're playing 34-d chess, and have done a bunch of other options trades surrounding it, to disguise it, you're just as likely to piss away all of your money before you even get a chance to insider-trade. That's the beauty of options - they will part a fool from their money before they can spit.
- jessaustin 6y ago
  It would be nice if SEC were this dogged in its pursuit of actual insider trading.
  - arthurcolle 6y ago
    Haha, that's a good one.
  - vkou 6y ago
    It is. Insider trading is one of the few things it is really good at prosecuting - mostly because it's dead-easy to identify, easy to prove, often performed by idiots, and has a lot of incredibly-well established law surrounding it that makes turning piles of evidence into jail time easy. None of these reasons hold for other financial crimes, which is why there are so few bankers and executives going to jail for everything that's not insider trading.
    - kortilla 6y ago
      Providing lots of examples of prosecutions does nothing to prove they catch even the majority of insider trades because there is no ground truth to work with here. Maybe the SEC is just good at catching people who don’t think through the paper trail.
    - jessaustin 6y ago
      Most "insider trading" is done by senior executives. As you observe, only non-connected "idiots" are ever prosecuted for insider trading. This "crime" is merely a way for corporate insiders to enforce penalties against those who defect from their conspiracy against the investing public. Non-insiders who trade on "inside" information release that information to the public, to the public's benefit, before the actual insiders are ready to profit at the public's expense.

vkou 6y ago

Yes, because the SEC isn't stupid, and would trawl through the data, until they found: * A set of freshly opened accounts. * That only shorted a single stock. * Right before a major hack. * That cashed out all at once. * That never traded again. And then they'd start calling the owners of those accounts, and asking questions. Most of those accounts would be legitimate traders, but that's fine - there's not that many accounts that satisfy four of those five criteria. A few sql queries can narrow it down to the point that basic detective work can solve the rest. The problem with playing stupid games on the stock market is that there's a very clear paper trail that will link you, as a human being, to the money that you're hoping to make. At least with bitcoin, you can theoretically isolate yourself from the source of the funds, through tumblers, transferring money in and out of shady exchanges, etc. This is also exactly how the SEC catches insider-traders. By analyzing the flow of trades, and following up on suspicious ones. If the first and only trade you've ever done in your life is a $200,000 short[1] on your employer twenty minutes before a disastrous earnings, you might soon be talking to a very nicely dressed man who would love to get another conviction under his belt. [1] If you think you're playing 34-d chess, and have done a bunch of other options trades surrounding it, to disguise it, you're just as likely to piss away all of your money before you even get a chance to insider-trade. That's the beauty of options - they will part a fool from their money before they can spit.

jessaustin 6y ago
It would be nice if SEC were this dogged in its pursuit of actual insider trading.
- arthurcolle 6y ago
  Haha, that's a good one.
- vkou 6y ago
  It is. Insider trading is one of the few things it is really good at prosecuting - mostly because it's dead-easy to identify, easy to prove, often performed by idiots, and has a lot of incredibly-well established law surrounding it that makes turning piles of evidence into jail time easy. None of these reasons hold for other financial crimes, which is why there are so few bankers and executives going to jail for everything that's not insider trading.
  - kortilla 6y ago
    Providing lots of examples of prosecutions does nothing to prove they catch even the majority of insider trades because there is no ground truth to work with here. Maybe the SEC is just good at catching people who don’t think through the paper trail.
  - jessaustin 6y ago
    Most "insider trading" is done by senior executives. As you observe, only non-connected "idiots" are ever prosecuted for insider trading. This "crime" is merely a way for corporate insiders to enforce penalties against those who defect from their conspiracy against the investing public. Non-insiders who trade on "inside" information release that information to the public, to the public's benefit, before the actual insiders are ready to profit at the public's expense.