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>he obtained from his wife, an Amazon finance employee, to place trades in Amazon stock–making a profit of $1,428,264 >Bohra engaged in illegal insider trading
by lizdax 5y ago
>he obtained from his wife, an Amazon finance employee, to place trades in Amazon stock–making a profit of $1,428,264
>Bohra engaged in illegal insider trading in advance of 11 straight earnings announcements.”
>He and his family members have paid $2,652,899 in disgorgement, interest and penalties.
And 26 months in prison! This is why if you're going to do any kind of trading yourself -- never touch the company you work for.
Some more info on the original SEC filing as well: https://www.sec.gov/litigation/complaints/2020/comp24923.pdf https://www.sec.gov/litigation/complaints/2020/comp24923.pdf
- samfisher83 5y agoHow did his wife get no prison time?
- SommaRaikkonen 5y agoFrom the article > As part of the plea agreement, Bohra’s wife will not face criminal charges. Bohra’s wife is no longer employed at Amazon.
- samfisher83 5y agoI understand the plea deal, but why. I am assuming they had evidence she gave him the data. Why let her off?
- ALittleLight 5y agoMay be they would have to risk a trial to convict both but he would plea guilty to protect his wife. If the state believes he was the most responsible then they may judge a guaranteed conviction without the cost of trial to be worth it. The wife (and family) lost 2.6 million, plus her job, and the husband - so it's not like she got away with something, just avoided the worst of the punishment.
- ycombobreaker 5y agodisgorged 2.6 million, that means just losing the ill-gotten gains. It's not fair to call that "lost".
- loeg 5y agoNo. $2.6M "in disgorgement, interest and penalties." The ill-gotten gains were only $1.4M. They had to pay back their gains, pay additional fees, and one of them serves jail time. They did not get away with anything.
- viraptor 5y agoIf they kept the $2.6M in a liquid saving account just for cases like this one, yeah, that wouldn't be so bad. But I don't expect that's the case and in practice that could mean for example losing her house.
- chews 5y agoif you don't personally profit from the bet... it's not one.
- deleted 5y ago[deleted]
- Thorrez 5y ago>Insider trading violations may also include "tipping" such information, securities trading by the person "tipped," and securities trading by those who misappropriate such information. It sounds to me like even giving information to someone if you know that person will trade is illegal. https://www.investor.gov/introduction-investing/investing-basics/glossary/insider-trading https://www.investor.gov/introduction-investing/investing-ba...
- lelanthran 5y ago> I understand the plea deal, but why. I am assuming they had evidence she gave him the data. Why let her off? "Giving someone the data" is probably a different violation to "trading with illegally obtained data". She probably got a different penalty (breaking NDA or similar) then he did.
- deleted 5y ago[deleted]
- nprz 5y agoThey can't arrest a husband and wife for the same crime.
- pionar 5y agoThat's not at all true.
- mikeyjk 5y agoA reference to the TV show Arrested Development :) Terrible legal advice given to a crooked businessman!
- deleted 5y ago[deleted]
- bin_bash 5y agoIn case you missed the reference: https://youtu.be/75iv3RKQUAM https://youtu.be/75iv3RKQUAM
- wpasc 5y agoI have the worst fucking attornies
- dragonwriter 5y agoYes they can. And there are lots of examples.
- mikestew 5y agoOh, sure, downvote a commenter because they didn't watch Arrested Development. c'mon, HN. :-P
- bhahn 5y agoJust speculation, but they may have children, and if so, prosecutors may have wanted to keep at least one parent out of jail.
- yarcob 5y agoIt would be nice if prosecutors really were that compassionate. I've read that lots of kids end up in foster care because their parents go to jail. But maybe that only happens to poor people. An alternative would be to have criminal parents serve time consecutively -- that way noone gets away, and the children would not have to be taken away.
- tech-historian 5y agoShe only committed some light treason.
- vmception 5y agoThey kicked back and relaxed, Emphasis on kickback. Basically they were able to cough up the $2mm the SEC wanted in the parallel civil suit, and didnt attempt to challenge the criminal case, so the prosecutors in the criminal case chose not to
- randyrand 5y agohttps://en.wikipedia.org/wiki/Women-are-wonderful_effect https://en.wikipedia.org/wiki/Women-are-wonderful_effect Women generally get less time for the same crime.
- nradov 5y agoThere's nothing illegal about trading your employer's stock if you don't have access to insider information. Millions of investors do that with no problems.
- refurb 5y agoPlenty of employers have company-wide blackouts for any stock trade in advance of earnings. So even if you don't have access to inside information you may be subject to company policies that prohibit it.
- unishark 5y agoYeah it's lame. Also they might prohibit shorting of the stock (always), preventing employees from locking in their stock option gains.
- sellyme 5y agoSomething being technically legal under some conditions doesn't automatically make it sound financial advice. There's a lot of companies out there. It's easy to pick one that definitely won't get you in to trouble instead of one that probably won't get you in to trouble.
- peeters 5y agoIf you work for a company that grants stock via shares or options, you're going to have to sell them at some point. At which point insider trading applies.
- wolfretcrap 5y agoIf simply being husband of a woman who works for Amazon can help you acquire such information on which you can perform insider trading. What stops from former workers at intelligence agencies from starting a hedge fund and employing all methods they learned while at work, to acquire such valuable information, trade based on that and offer others money management services?
- ForHackernews 5y agoThere are laws against corporate espionage. In terms of legal intelligence gathering, hedge funds already do that: https://newsroom.haas.berkeley.edu/how-hedge-funds-use-satellite-images-to-beat-wall-street-and-main-street/ https://newsroom.haas.berkeley.edu/how-hedge-funds-use-satel...
- staplers 5y agoI'd guess the same thing that stops Senators from trading on inside knowledge of global issues.. nothing
- sfifs 5y ago> What stops from former workers at intelligence agencies from starting a hedge fund and employing all methods they learned while at work, to acquire such valuable information, trade based on that and offer others money management services? That wouldn't be insider trading. Indeed hedge funds are known to use intelligence data like satellite photos etc. If they use illegal monitoring devices, hacking for info etc, they may fall afoul of federal espionage, wiretapping or CFFA, but it would still not be insider trading.
- rich_sasha 5y ago> if they use illegal monitoring devices, hacking for info etc, they may fall afoul of federal espionage, wiretapping or CFFA, but it would still not be insider trading. Thats an interesting point, if I hack the CEO’s phone and get the earnings number a day ahead, then trade off them, I kind of wonder how that isnt insider information. Although laws around that are so odd, especially in US, that it wouldn’t surprise me.
- TwoBit 5y agoHe blatantly traded those 11 times during blackout periods. Companies make it very clear what these blackout periods are, so this was very stupid, as he was bound to get caught.
- fy20 5y agoI wonder if he would have been caught if instead of buying Amazon directly, he bought an index fund that has them? I think Amazon makes up something like 3% of some of the Vanguard index funds.
- yarcob 5y agoI assume that the guy bought some type of short term options on Amazon to bet on rising/falling stock prices. I don't think buying an index fund, even with insider information, would allow for such massive profits.