10 ms·

SEC Enforcement of Insider Trading Dropped to Lowest Point in Decades

262 points by everybodyknows 6y ago

kolbe 6y ago
Insider trading is more or less dead. The only people who do it are a very small overlap of the Venn diagram of people who have access to material nonpubluc information and don’t yet know it’s impossible to monetize it. Every hedge fund knows where the line is and they never cross it. I know NPR wants to imply this is because the GOP is soft on crimes like this, but it’s probably more due to these crimes no longer happening.
- gruez 6y ago
  >Insider trading is more or less dead Is there any evidence supporting this claim? >The only people who do it are a very small overlap of the Venn diagram of people who have access to material nonpubluc information and don’t yet know it’s impossible to monetize it Which side is it? That there are less people people who have insider information, or that it's harder to monetize insider information? Unless there's big shift in US corporate culture leading to better information controls across the board, I don't think it's the former. I can't think of anything that'd change the latter, unless HFT/hedge funds found some sort of crystal ball so they can front-run the insiders.
  - smabie 6y ago
    Hedge funds aren't run like they were in the early 2000s. It's not about individual traders posting PnL, it's about entire teams working together. In the past, individual traders would try and get inside information in order to post good returns. It's not like everyone at the hedge fund worked together to insider trade, that'd be too risky. As a result of the individual book model dying, inside information isn't worth much. You can't trade on your own, and you can't share it with others. Moreover, with outflows from discretionary to quantitative strategies, there's not that many hedge funds (by capital at least) that could even do anything with inside information. It's not like if some guy at Bridgewater got a hot merger tip he would even be able to do anything with it. tl:dr: lots of things have changed, and the industry is no longer conducive to exploiting insider information. I'm sure it still happens, but at an individual or informal kind of level. It's not an institutionalized accpeted thing like at SAC or Gallion, for example.
    - strbean 6y ago
      > Hedge funds aren't run like they were in the early 2000s. It appears that they changed how they were run the instant Trump was elected. Funny how that works!
      - SpicyLemonZest 6y ago
        Total SEC enforcement actions are still dancing around their peak, so a hypothesis that the administration has become more friendly to financial misconduct seems disconfirmed.
        tehjoker 6y ago
        I would be extremely interested to know what that total is comprised of. If it's, for example, tons of warning letters with nothing further, that would be a great way to look busy doing something while doing nothing.
      - Nightshaxx 6y ago
        I saw you post this comment multiple times. Correlation does not equal causation my friend.
        strbean 6y ago
        Correlation more often is the result of causation than it is of "handy wavy arguments about human nature".
        Nightshaxx 6y ago
        "Correlation does not mean causation" has nothing to do with the amount that correlation is the result of causation. It means that the former does not directly imply the latter, you need to add more to your argument than just the correlation argument. There could be other factors at play that were the actual cause of the change. These factors could be the underlying causes for both events, or the events may be completely separate. The only thing you said was "because X and Y happened at the same time, they seem to be connected". You did not make any other arguments about how X could cause Y. Within the past hour, I went to the bathroom, and also at least one person on earth died. As you can see, to say my bathroom trip caused that persons death is illogical without any other facts or evidence to back it up. This is a really funny site btw: https://www.tylervigen.com/spurious-correlations https://www.tylervigen.com/spurious-correlations
  - strbean 6y ago
    Looking at the chart in the article, CLEARLY one of those factors made a massive shift right when Trump got elected! Suddenly everyone realized it was bad and they shouldn't do it.
  - kolbe 6y ago
    > Which side is it? That there are less people people who have insider information, or that it's harder to monetize insider information? It’s both. There’s no reason to acquire the information if you cannot monetize it sufficiently. It becomes a liability to have it around. And the whole reason you cannot monetize it sufficiently is that the moment any event occurs, the SEC/FINRA combs through everyone whose trading patterns were suspicious. With the amount of surveillance, you’re almost guaranteed to get caught. There’s no secret meeting in a parking lot. There’s no Signal communications. I’m not saying there is no criminality in the financial world. Just that this particular crime is so heavily watched and carries such a strong punishment that no rational investor risks it. It mostly ends up being retail guys who got a tip, but didn’t know that the tip was illegal or they just had no clue the depth that the DoJ’s tentacles can reach. My evidence is that I’m in this world. HFs have departments that read research and then cross checks it to make sure it only includes public information. If somehow a nonpublic piece slips in, they kill the trade.
- unwoundmouse 6y ago
  you must be one of those "sheeple"
bosswipe 6y ago
Capitalists and their politicians have been into "defund the police" long before it was cool. Though only their police such as the SEC, IRS, FTC, EPA, etc.
- defterGoose 6y ago
  "Black Lines Matter" But seriously, prosecution of white collar crime on a scale that actually makes change seems to have gone the way of the dodo here.
  - dylan604 6y ago
    How many people from the 2008 crash went to jail? After that, I realized we are no further from the robber barons on old.
    - jandrese 6y ago
      That guy who reused some code from Goldman went to jail.
    - kortilla 6y ago
      Jail for what? Please be specific. The problem with the 2008 crash was that it was a systemic flaw spread across many parties (originators, bundlers, derivative underwriters, etc). There wasn’t some cabal of evil laughing traders watching as their grand scheme collapsed.
      - dylan604 6y ago
        How about the guys knowingly making loans to people that could not afford them because they knew those loans would be sold so they would not be on the hook for them. How about the guys that hid very shady/risky debt that spread like cancer throughout the system. You can't honestly think that that whole crisis was from a small number of bad actors? People knew to look the other way.
        6y ago
jb775 6y ago
My guess is that insider trading practices are simply getting smarter. e.g. receive a hot insider tip? In the old days they'd just buy up a bunch of that stock. Nowadays, there are systems that can trigger diversified purchases across multiple asset classes & markets that end up reaping just as much profit (if not more), while obfuscating the financial ties.
- godzillabrennus 6y ago
  Nominee manager for a Wyoming LLC to do your trading? Pay the nominee manager in crypto currency and have them open a bank account for the LLC? America is awesome at money laundering.
  - DrAwdeOccarim 6y ago
    What I'm about to say will probably trigger a backlash, but...bitcoin is a public, immutable ledger. Why would someone think that would be a good idea to do crime in? Are bitcoin tumblers really good enough? You need to place a lot of trust in actors whose desires may not always align with yours. Better idea would be to just split the winnings with them.
    - Alekhine 6y ago
      Monero, a fungible, privacy-focused coin exists. It's near a hundred dollars in value now.
      - DrAwdeOccarim 6y ago
        Yes, I agree.
- Analemma_ 6y ago
  Also the coordination/communication is being done with burner phones and encrypted chat apps, so there's no paper trail.
- anonu 6y ago
roenxi 6y ago
Insider trading is one of those crimes where it is a bit ambiguous as to what the crime is (at least to me). Information travels with some speed and there will always be people with access to better information making better decisions. We have much better technology these days. Rather than making trading some sort of crime we should just have a "relevant persons" standard where CEOs and anyone who has close contact with them have to register what they are about to do a few days before they make any trades of shares in the company. It is fundamentally a bit silly have a situation where it is illegal for someone to make best decision given their knowledge. We can safely guess that the professional traders are leveraging every possible edge, fair or not, SEC regulation or not if they think they can get away with it.
- Galanwe 6y ago
  > CEOs and anyone who has close contact with them have to register what they are about to do a few days before they make any trades of shares in the company. That is already the case, top executives trading is publically reported. This is why insider trading often catches relatives of the person in the know. Like the CEO would ask his cousin to make the trades for him.
- dehrmann 6y ago
  > Insider trading is one of those crimes where it is a bit ambiguous as to what the crime is (at least to me) Before someone is quick to say "how can you not know?!," there are some pretty ambiguous cases around trading on material, non-public information. - Counting cars in parking lots as a proxy for sales. - Your employer sees a drop in sales and is able to directly attribute it to a competitor. Can you buy shares in the competitor? - You're at a bar in NYC and a drunk i-banker is trying to impress a girl and runs his mouth and talks about a pending acquisition.
  - postnihilism 6y ago
    Agreed, but the parking lot example seems like a clear example of public information.
  - Znafon 6y ago
greatwave1 6y ago
The recent Kodak situation (where a huge options bonus was given to their CEO the day before announcing a major government loan) goes to show how little some executives are worried about insider trading prosecution. I've been working on a dashboard to track insider transactions at S&P 500 companies, you can check it out at https://www.quiverquant.com/sources/insidertrading https://www.quiverquant.com/sources/insidertrading
- kortilla 6y ago
  Giving a CEO options isn’t really insider trading. CEOs constantly receive stock and stock price based bonuses.
  - chrisbolt 6y ago
    > CEOs constantly receive stock and stock price based bonuses. "a huge options bonus" https://www.bloomberg.com/news/newsletters/2020-08-03/money-stuff-now-an-app-can-pitch-mergers https://www.bloomberg.com/news/newsletters/2020-08-03/money-... > Giving CEO James Continenza options to buy 2 million shares at prices up to $12, when the stock was trading at $2.62, the day before an announcement that sent the stock up to $21.85, seems (1) generous and (2) well-timed.
    - shajznnckfke 6y ago
      Assuming the options grant was coordinated with the loan deal (so we don’t need any innuendo about the suspicious timing), would that be insider trading? Couldn’t a company explicitly give a bonus to an executive as a reward for winning some business? Matt Levine makes a similar point in the article you linked.
      - take_a_breath 6y ago
        ==Assuming the options grant was coordinated with the loan deal (so we don’t need any innuendo about the suspicious timing), would that be insider trading?== We shouldn’t assume that considering the Kodak gave a completely different reason: “The options were granted to shield Continenza’s overall stake in the company from being diluted by a $100 million convertible bond deal clinched in May 2019 to help Eastman Kodak stay afloat, according to the person’s account.”
seibelj 6y ago
Insider trading is a victimless “crime” where I believe the penalties are immoral. Simply not https://reason.com/2014/06/17/insider-trading-is-really-common-awesome/ https://reason.com/2014/06/17/insider-trading-is-really-comm...
- skosch 6y ago
  As another commenter pointed out, the victim is the public's trust in the financial market. With transactions between private entities, information asymmetry is a normal part of life. But if you want to be able to sell your shares on a public market, the public first needs to trust that you won't screw them over. That trust is a public good worthy of government protection, just like we have government agencies to protecting clean air and fair elections.
  - seibelj 6y ago
    I simply disagree. The sale itself is all the information the market needs. I don't care about insider trading and I don't need the government's protection for it.
- jandrese 6y ago
  The victims are literally everybody else in the market. Basically, do you want the markets open to the public, or only to a small cadre of trusted insiders? Allowing insider trading means if you aren't an insider it is a suckers game.
082349872349872 6y ago
Although Hanlon's Razor advises considering incompetence[1] before ascribing malice[2], there's always this advice from 1944: (p.29) 11.b.10: "To lower morale and with it, production, be pleasant to inefficient workers; give them undeserved promotions. Discriminate against efficient workers; complain unjustly about their work." [1] https://news.ycombinator.com/item?id=23389921 https://news.ycombinator.com/item?id=23389921 [2] https://www.cia.gov/news-information/featured-story-archive/2012-featured-story-archive/CleanedUOSSSimpleSabotage_sm.pdf https://www.cia.gov/news-information/featured-story-archive/... We play croquet And go rollerblading Here's to homies on lock For insider trading
- magicnubs 6y ago
  I'm not sure I understand. SEC employees are being secretly trained to destroy it from within?
  - 082349872349872 6y ago
    More that if Avakian and Peikin were explicitly following the OSS guidelines for sabotage, they'd be promoting inefficient enforcement and discouraging efficient enforcement. Now, I don't believe those two are doing anything of the sort, but a look at the current US ministers certainly reminds me of the soviet chief rabbi joke. I once made fun of Boris Johnson because he videoconferenced with a bookshelf in the background that appeared to have been bought by colour, but he's still doing better than the US Secretary of Education, who didn't even have any books on her background bookshelf... (Of course, maybe I'm too cynical, and enforcement of insider trading has dropped precipitously because they've found something more important to enforce?)
m3at 6y ago
Note that the enforcement of a lot of regulations and rights _in general_ have been under-enforced under Trump. This Patriot Act episode is an entertaining take on a topic that is very little comical[1]. [1] https://youtu.be/uKXIvfQnYEY https://youtu.be/uKXIvfQnYEY
joschmo 6y ago
My first thought was that this couldn't possibly be hedge funds reaping the gains of a Republican government because the hedge business is doing pretty miserably. How could their funds be collapsing and still be insider traders? But thinking about it further, there is still a category of hedge funds at the absolute top like Lone Pine, Viking, and D1 that are doing exceptionally well. D1 is newer but the others continue to defy the odds year after year while their peers collapse. And I could probably name 20 funds in total like that. So maybe fewer funds are participating but they are doing it better?
- itsoktocry 6y ago
  >My first thought was that this couldn't possibly be hedge funds reaping the gains of a Republican government because the hedge business is doing pretty miserably. This isn't "hedge funds", it is quite clearly executives at companies. The SEC has deemed high-profile execs untouchable.
kjaftaedi 6y ago
Brian Krzanich (former CEO of Intel) sold all of the stock he could as soon as Google informed Intel about spectre and meltdown. It's hard not to think that insider trading won't be punished when even the most obvious cases fly by with hardly a mention.
TheButlerian 6y ago
Good, the insider trading laws should be abolished.
- jandrese 6y ago
  Because insider trading is a good thing or do you think they should be replaced by something else?
anonu 6y ago
My view on this is Insider trading is rampant. Trying to squash it, while a good endeavor, is like trying to eradicate cockroaches. There's always more... The most egregious cases will probably still get prosecuted and this still serves as a deterrent, but there will be a few more people walking free.
linuxlizard 6y ago
I have some insider information I can offer. DM me. Update: I should delete this because it doesn't offer anything useful to the discussion.
- linuxlizard 6y ago
  Seems like now is a perfect opportunity!
rmrfstar 6y ago
This is another example of the US backsliding on what it has historically claimed as its competitive advantage: efficient markets, a lack of corruption, and rule of law. For the people out there claiming that this development is an exclusively Republican project, I offer [1] as a counterexample. In the market right now there are widespread practices that would have been prosecuted a decade ago. “Alternative data” is a euphemism for “insider trading, but on a computer”. It’s the alpha capture [2] of today. [1] https://www.govtrack.us/congress/bills/116/hr2534 https://www.govtrack.us/congress/bills/116/hr2534 [2] https://www.cnbc.com/2014/01/09/blackrock-agrees-with-ny-attorney-general-to-end-analyst-surveys.html https://www.cnbc.com/2014/01/09/blackrock-agrees-with-ny-att...

Insider trading is more or less dead. The only people who do it are a very small overlap of the Venn diagram of people who have access to material nonpubluc information and don’t yet know it’s impossible to monetize it. Every hedge fund knows where the line is and they never cross it. I know NPR wants to imply this is because the GOP is soft on crimes like this, but it’s probably more due to these crimes no longer happening.

gruez 6y ago
>Insider trading is more or less dead Is there any evidence supporting this claim? >The only people who do it are a very small overlap of the Venn diagram of people who have access to material nonpubluc information and don’t yet know it’s impossible to monetize it Which side is it? That there are less people people who have insider information, or that it's harder to monetize insider information? Unless there's big shift in US corporate culture leading to better information controls across the board, I don't think it's the former. I can't think of anything that'd change the latter, unless HFT/hedge funds found some sort of crystal ball so they can front-run the insiders.
- smabie 6y ago
  Hedge funds aren't run like they were in the early 2000s. It's not about individual traders posting PnL, it's about entire teams working together. In the past, individual traders would try and get inside information in order to post good returns. It's not like everyone at the hedge fund worked together to insider trade, that'd be too risky. As a result of the individual book model dying, inside information isn't worth much. You can't trade on your own, and you can't share it with others. Moreover, with outflows from discretionary to quantitative strategies, there's not that many hedge funds (by capital at least) that could even do anything with inside information. It's not like if some guy at Bridgewater got a hot merger tip he would even be able to do anything with it. tl:dr: lots of things have changed, and the industry is no longer conducive to exploiting insider information. I'm sure it still happens, but at an individual or informal kind of level. It's not an institutionalized accpeted thing like at SAC or Gallion, for example.
  - strbean 6y ago
    > Hedge funds aren't run like they were in the early 2000s. It appears that they changed how they were run the instant Trump was elected. Funny how that works!
    - SpicyLemonZest 6y ago
      Total SEC enforcement actions are still dancing around their peak, so a hypothesis that the administration has become more friendly to financial misconduct seems disconfirmed.
      - tehjoker 6y ago
        I would be extremely interested to know what that total is comprised of. If it's, for example, tons of warning letters with nothing further, that would be a great way to look busy doing something while doing nothing.
    - Nightshaxx 6y ago
      I saw you post this comment multiple times. Correlation does not equal causation my friend.
      - strbean 6y ago
        Correlation more often is the result of causation than it is of "handy wavy arguments about human nature".
        Nightshaxx 6y ago
        "Correlation does not mean causation" has nothing to do with the amount that correlation is the result of causation. It means that the former does not directly imply the latter, you need to add more to your argument than just the correlation argument. There could be other factors at play that were the actual cause of the change. These factors could be the underlying causes for both events, or the events may be completely separate. The only thing you said was "because X and Y happened at the same time, they seem to be connected". You did not make any other arguments about how X could cause Y. Within the past hour, I went to the bathroom, and also at least one person on earth died. As you can see, to say my bathroom trip caused that persons death is illogical without any other facts or evidence to back it up. This is a really funny site btw: https://www.tylervigen.com/spurious-correlations https://www.tylervigen.com/spurious-correlations
- strbean 6y ago
  Looking at the chart in the article, CLEARLY one of those factors made a massive shift right when Trump got elected! Suddenly everyone realized it was bad and they shouldn't do it.
- kolbe 6y ago
  > Which side is it? That there are less people people who have insider information, or that it's harder to monetize insider information? It’s both. There’s no reason to acquire the information if you cannot monetize it sufficiently. It becomes a liability to have it around. And the whole reason you cannot monetize it sufficiently is that the moment any event occurs, the SEC/FINRA combs through everyone whose trading patterns were suspicious. With the amount of surveillance, you’re almost guaranteed to get caught. There’s no secret meeting in a parking lot. There’s no Signal communications. I’m not saying there is no criminality in the financial world. Just that this particular crime is so heavily watched and carries such a strong punishment that no rational investor risks it. It mostly ends up being retail guys who got a tip, but didn’t know that the tip was illegal or they just had no clue the depth that the DoJ’s tentacles can reach. My evidence is that I’m in this world. HFs have departments that read research and then cross checks it to make sure it only includes public information. If somehow a nonpublic piece slips in, they kill the trade.
unwoundmouse 6y ago
you must be one of those "sheeple"

bosswipe 6y ago

Capitalists and their politicians have been into "defund the police" long before it was cool. Though only their police such as the SEC, IRS, FTC, EPA, etc.

defterGoose 6y ago
"Black Lines Matter" But seriously, prosecution of white collar crime on a scale that actually makes change seems to have gone the way of the dodo here.
- dylan604 6y ago
  How many people from the 2008 crash went to jail? After that, I realized we are no further from the robber barons on old.
  - jandrese 6y ago
    That guy who reused some code from Goldman went to jail.
  - kortilla 6y ago
    Jail for what? Please be specific. The problem with the 2008 crash was that it was a systemic flaw spread across many parties (originators, bundlers, derivative underwriters, etc). There wasn’t some cabal of evil laughing traders watching as their grand scheme collapsed.
    - dylan604 6y ago
      How about the guys knowingly making loans to people that could not afford them because they knew those loans would be sold so they would not be on the hook for them. How about the guys that hid very shady/risky debt that spread like cancer throughout the system. You can't honestly think that that whole crisis was from a small number of bad actors? People knew to look the other way.
      - 6y ago

jb775 6y ago

My guess is that insider trading practices are simply getting smarter. e.g. receive a hot insider tip? In the old days they'd just buy up a bunch of that stock. Nowadays, there are systems that can trigger diversified purchases across multiple asset classes & markets that end up reaping just as much profit (if not more), while obfuscating the financial ties.

godzillabrennus 6y ago
Nominee manager for a Wyoming LLC to do your trading? Pay the nominee manager in crypto currency and have them open a bank account for the LLC? America is awesome at money laundering.
- DrAwdeOccarim 6y ago
  What I'm about to say will probably trigger a backlash, but...bitcoin is a public, immutable ledger. Why would someone think that would be a good idea to do crime in? Are bitcoin tumblers really good enough? You need to place a lot of trust in actors whose desires may not always align with yours. Better idea would be to just split the winnings with them.
  - Alekhine 6y ago
    Monero, a fungible, privacy-focused coin exists. It's near a hundred dollars in value now.
    - DrAwdeOccarim 6y ago
      Yes, I agree.
Analemma_ 6y ago
Also the coordination/communication is being done with burner phones and encrypted chat apps, so there's no paper trail.
anonu 6y ago

roenxi 6y ago

Insider trading is one of those crimes where it is a bit ambiguous as to what the crime is (at least to me). Information travels with some speed and there will always be people with access to better information making better decisions. We have much better technology these days. Rather than making trading some sort of crime we should just have a "relevant persons" standard where CEOs and anyone who has close contact with them have to register what they are about to do a few days before they make any trades of shares in the company. It is fundamentally a bit silly have a situation where it is illegal for someone to make best decision given their knowledge. We can safely guess that the professional traders are leveraging every possible edge, fair or not, SEC regulation or not if they think they can get away with it.

Galanwe 6y ago
> CEOs and anyone who has close contact with them have to register what they are about to do a few days before they make any trades of shares in the company. That is already the case, top executives trading is publically reported. This is why insider trading often catches relatives of the person in the know. Like the CEO would ask his cousin to make the trades for him.
dehrmann 6y ago
> Insider trading is one of those crimes where it is a bit ambiguous as to what the crime is (at least to me) Before someone is quick to say "how can you not know?!," there are some pretty ambiguous cases around trading on material, non-public information. - Counting cars in parking lots as a proxy for sales. - Your employer sees a drop in sales and is able to directly attribute it to a competitor. Can you buy shares in the competitor? - You're at a bar in NYC and a drunk i-banker is trying to impress a girl and runs his mouth and talks about a pending acquisition.
- postnihilism 6y ago
  Agreed, but the parking lot example seems like a clear example of public information.
- Znafon 6y ago

greatwave1 6y ago

The recent Kodak situation (where a huge options bonus was given to their CEO the day before announcing a major government loan) goes to show how little some executives are worried about insider trading prosecution. I've been working on a dashboard to track insider transactions at S&P 500 companies, you can check it out at https://www.quiverquant.com/sources/insidertrading https://www.quiverquant.com/sources/insidertrading

kortilla 6y ago
Giving a CEO options isn’t really insider trading. CEOs constantly receive stock and stock price based bonuses.
- chrisbolt 6y ago
  > CEOs constantly receive stock and stock price based bonuses. "a huge options bonus" https://www.bloomberg.com/news/newsletters/2020-08-03/money-stuff-now-an-app-can-pitch-mergers https://www.bloomberg.com/news/newsletters/2020-08-03/money-... > Giving CEO James Continenza options to buy 2 million shares at prices up to $12, when the stock was trading at $2.62, the day before an announcement that sent the stock up to $21.85, seems (1) generous and (2) well-timed.
  - shajznnckfke 6y ago
    Assuming the options grant was coordinated with the loan deal (so we don’t need any innuendo about the suspicious timing), would that be insider trading? Couldn’t a company explicitly give a bonus to an executive as a reward for winning some business? Matt Levine makes a similar point in the article you linked.
    - take_a_breath 6y ago
      ==Assuming the options grant was coordinated with the loan deal (so we don’t need any innuendo about the suspicious timing), would that be insider trading?== We shouldn’t assume that considering the Kodak gave a completely different reason: “The options were granted to shield Continenza’s overall stake in the company from being diluted by a $100 million convertible bond deal clinched in May 2019 to help Eastman Kodak stay afloat, according to the person’s account.”

seibelj 6y ago

Insider trading is a victimless “crime” where I believe the penalties are immoral. Simply not https://reason.com/2014/06/17/insider-trading-is-really-common-awesome/ https://reason.com/2014/06/17/insider-trading-is-really-comm...

skosch 6y ago
As another commenter pointed out, the victim is the public's trust in the financial market. With transactions between private entities, information asymmetry is a normal part of life. But if you want to be able to sell your shares on a public market, the public first needs to trust that you won't screw them over. That trust is a public good worthy of government protection, just like we have government agencies to protecting clean air and fair elections.
- seibelj 6y ago
  I simply disagree. The sale itself is all the information the market needs. I don't care about insider trading and I don't need the government's protection for it.
jandrese 6y ago
The victims are literally everybody else in the market. Basically, do you want the markets open to the public, or only to a small cadre of trusted insiders? Allowing insider trading means if you aren't an insider it is a suckers game.

082349872349872 6y ago

Although Hanlon's Razor advises considering incompetence[1] before ascribing malice[2], there's always this advice from 1944: (p.29) 11.b.10: "To lower morale and with it, production, be pleasant to inefficient workers; give them undeserved promotions. Discriminate against efficient workers; complain unjustly about their work." [1] https://news.ycombinator.com/item?id=23389921 https://news.ycombinator.com/item?id=23389921 [2] https://www.cia.gov/news-information/featured-story-archive/2012-featured-story-archive/CleanedUOSSSimpleSabotage_sm.pdf https://www.cia.gov/news-information/featured-story-archive/... We play croquet And go rollerblading Here's to homies on lock For insider trading

magicnubs 6y ago
I'm not sure I understand. SEC employees are being secretly trained to destroy it from within?
- 082349872349872 6y ago
  More that if Avakian and Peikin were explicitly following the OSS guidelines for sabotage, they'd be promoting inefficient enforcement and discouraging efficient enforcement. Now, I don't believe those two are doing anything of the sort, but a look at the current US ministers certainly reminds me of the soviet chief rabbi joke. I once made fun of Boris Johnson because he videoconferenced with a bookshelf in the background that appeared to have been bought by colour, but he's still doing better than the US Secretary of Education, who didn't even have any books on her background bookshelf... (Of course, maybe I'm too cynical, and enforcement of insider trading has dropped precipitously because they've found something more important to enforce?)

m3at 6y ago

Note that the enforcement of a lot of regulations and rights _in general_ have been under-enforced under Trump. This Patriot Act episode is an entertaining take on a topic that is very little comical[1]. [1] https://youtu.be/uKXIvfQnYEY https://youtu.be/uKXIvfQnYEY

joschmo 6y ago

My first thought was that this couldn't possibly be hedge funds reaping the gains of a Republican government because the hedge business is doing pretty miserably. How could their funds be collapsing and still be insider traders? But thinking about it further, there is still a category of hedge funds at the absolute top like Lone Pine, Viking, and D1 that are doing exceptionally well. D1 is newer but the others continue to defy the odds year after year while their peers collapse. And I could probably name 20 funds in total like that. So maybe fewer funds are participating but they are doing it better?

itsoktocry 6y ago
>My first thought was that this couldn't possibly be hedge funds reaping the gains of a Republican government because the hedge business is doing pretty miserably. This isn't "hedge funds", it is quite clearly executives at companies. The SEC has deemed high-profile execs untouchable.

kjaftaedi 6y ago

Brian Krzanich (former CEO of Intel) sold all of the stock he could as soon as Google informed Intel about spectre and meltdown. It's hard not to think that insider trading won't be punished when even the most obvious cases fly by with hardly a mention.

TheButlerian 6y ago

Good, the insider trading laws should be abolished.

jandrese 6y ago
Because insider trading is a good thing or do you think they should be replaced by something else?

anonu 6y ago

My view on this is Insider trading is rampant. Trying to squash it, while a good endeavor, is like trying to eradicate cockroaches. There's always more... The most egregious cases will probably still get prosecuted and this still serves as a deterrent, but there will be a few more people walking free.

linuxlizard 6y ago

I have some insider information I can offer. DM me. Update: I should delete this because it doesn't offer anything useful to the discussion.

linuxlizard 6y ago
Seems like now is a perfect opportunity!

rmrfstar 6y ago

This is another example of the US backsliding on what it has historically claimed as its competitive advantage: efficient markets, a lack of corruption, and rule of law. For the people out there claiming that this development is an exclusively Republican project, I offer [1] as a counterexample. In the market right now there are widespread practices that would have been prosecuted a decade ago. “Alternative data” is a euphemism for “insider trading, but on a computer”. It’s the alpha capture [2] of today. [1] https://www.govtrack.us/congress/bills/116/hr2534 https://www.govtrack.us/congress/bills/116/hr2534 [2] https://www.cnbc.com/2014/01/09/blackrock-agrees-with-ny-attorney-general-to-end-analyst-surveys.html https://www.cnbc.com/2014/01/09/blackrock-agrees-with-ny-att...