5 ms·

> Bannon agreed to pay a civil penalty of $281,497, Rauch agreed to pay a civil penalty of $128,230, and Ramaiya agreed to pay a civil penalty of $65,780. Sood

by fny 5y ago

> Bannon agreed to pay a civil penalty of $281,497, Rauch agreed to pay a civil penalty of $128,230, and Ramaiya agreed to pay a civil penalty of $65,780. Sood also consented to the entry of a final judgment and agreed to pay a civil penalty of $178,320. So the SEC claims they found $1.7M in insider trading, and they only collect $700K. This assumes the ring didn't do more. No wonder bigger players do this in size. What a joke.

Retric 5y ago
Not quite: Wylam has consented to a permanent injunction with civil penalties, if any, to be decided later by the court. The SEC’s litigation against Brown is continuing. In parallel proceedings, the U.S. Attorney’s Office for the Northern District of California today announced related criminal charges against Brown, Wylam, and Sood.
jwineinger 5y ago
IANAL, but I assume these penalties be on top of the seizure of the illicit gains. If not, I completely agree with your sentiment.
u678u 5y ago
I'm guessing the penalty is low because they're not professionals. > No wonder bigger players do this in size. What a joke. Not sure who you mean by that. SEC is all over every major player.
- zhengyi13 5y ago
  I don't know who GP might have had in mind, if any specifics, but what comes immediately to my mind at least is the whole-lotta-smoke that seems to come from the general vicinity of Congress (e.g. https://en.wikipedia.org/wiki/2020_congressional_insider_trading_scandal https://en.wikipedia.org/wiki/2020_congressional_insider_tra...).
JumpCrisscross 5y ago
> the SEC claims they found $1.7M in insider trading, and they only collect $700K Nothing has been collected. This is a complaint [1] being put to court demanding a jury trial. The § 21A civil monetary penalties are in addition to "further relief as the Court deems appropriate," which is legal speak for we don't know how to divvy up the gains just yet but want to put specific dollar fines in the complaint attached to each defendant. (The SEC doesn't put people in jail. The DoJ is conducting its criminal investigation, which takes more time for obvious reasons.) There is a stark difference between financial professionals and laypeople in terms of how they judge the risk of getting caught for insider trading and the scale of the punishment that comes with it. [1] https://www.sec.gov/litigation/complaints/2021/comp-pr2021-103.pdf https://www.sec.gov/litigation/complaints/2021/comp-pr2021-1...
vmception 5y ago
They avoided losses and only made some gains SEC went after the new money
paulpauper 5y ago
If guilty, it's a joke that they only have to pay a penalty instead of going to jail. It means it's rational for everyone to try insider trading at least once, knowing that if you fail the worst that can hapepn is you lose your profits.
- onemoresoop 5y ago
  That's the sad truth, these laws were written with a dedication for the white collar and the rich. We will never get better as a nation if we don't don't address these issues first. Or the alternative is to wait for the house of cards to collapse and start over.
  - outworlder 5y ago
    That's all done on purpose. https://www.youtube.com/watch?v=rStL7niR7gs https://www.youtube.com/watch?v=rStL7niR7gs
- ascagnel_ 5y ago
  As other commenters have noted, the SEC doesn't have the power to bring criminal complaints; however, they do frequently refer such cases to the DoJ, which is in the process of bringing criminal complaints against three of the conspirators.
- pmoriarty 5y ago
  Even if they did go to jail they'd likely get a short stint at a minimum security country club. Meanwhile someone stealing a pack of chewing gum from a convenience store might get shot, and someone stealing a $500 TV could wind up serving hard time in a prison where they might get raped, tortured, or murdered.
wnevets 5y ago
God forbid if you steal a pack of gum, have an oz of weed or write a bad check though.
jmacd 5y ago
I saw the name Rauch and my heart sank! Thank goodness it didn't go the way I thought it did for a second there.
gamblor956 5y ago
In 2020, SCOTUS decided to limit the SEC's ability to impose disgorgement of profits sanctions, see Liu v SEC. https://www.supremecourt.gov/opinions/19pdf/18-1501_8n5a.pdf https://www.supremecourt.gov/opinions/19pdf/18-1501_8n5a.pdf. The rationale behind the decision was that disgorgement imposed joint and several liability rather than individual liabiity, and that disgorgement didn't take into account business expenses incurred in acquiring the illegally acquired income... So now, the SEC has to determine disgorgement sanctions on a per-defendant basis, rather than assessing it as a single joint amount and making the wrong-doers go after each other for reimbursements. Note though that the $700k are just the fines, not the disgorgement sanction, which will presumably be issued soon. (The $700k penalties are not treated as deductible expenses, so they're effectively on top of whatever disgorgement is ordered.)
akomtu 5y ago
That's some ultrasmall fish right there. Just weeks ago Pelosi's husband made a few millions off timely bought MSFT call options, right before Pelosi gave MS a gov contract. In their case is very legal because high rank gov figures are exempt from the insider trading law.

by fny 5y ago

Retric 5y ago

Not quite: Wylam has consented to a permanent injunction with civil penalties, if any, to be decided later by the court. The SEC’s litigation against Brown is continuing. In parallel proceedings, the U.S. Attorney’s Office for the Northern District of California today announced related criminal charges against Brown, Wylam, and Sood.

jwineinger 5y ago

IANAL, but I assume these penalties be on top of the seizure of the illicit gains. If not, I completely agree with your sentiment.

u678u 5y ago

I'm guessing the penalty is low because they're not professionals. > No wonder bigger players do this in size. What a joke. Not sure who you mean by that. SEC is all over every major player.

zhengyi13 5y ago
I don't know who GP might have had in mind, if any specifics, but what comes immediately to my mind at least is the whole-lotta-smoke that seems to come from the general vicinity of Congress (e.g. https://en.wikipedia.org/wiki/2020_congressional_insider_trading_scandal https://en.wikipedia.org/wiki/2020_congressional_insider_tra...).

JumpCrisscross 5y ago

> the SEC claims they found $1.7M in insider trading, and they only collect $700K Nothing has been collected. This is a complaint [1] being put to court demanding a jury trial. The § 21A civil monetary penalties are in addition to "further relief as the Court deems appropriate," which is legal speak for we don't know how to divvy up the gains just yet but want to put specific dollar fines in the complaint attached to each defendant. (The SEC doesn't put people in jail. The DoJ is conducting its criminal investigation, which takes more time for obvious reasons.) There is a stark difference between financial professionals and laypeople in terms of how they judge the risk of getting caught for insider trading and the scale of the punishment that comes with it. [1] https://www.sec.gov/litigation/complaints/2021/comp-pr2021-103.pdf https://www.sec.gov/litigation/complaints/2021/comp-pr2021-1...

vmception 5y ago

They avoided losses and only made some gains SEC went after the new money

paulpauper 5y ago

If guilty, it's a joke that they only have to pay a penalty instead of going to jail. It means it's rational for everyone to try insider trading at least once, knowing that if you fail the worst that can hapepn is you lose your profits.

onemoresoop 5y ago
That's the sad truth, these laws were written with a dedication for the white collar and the rich. We will never get better as a nation if we don't don't address these issues first. Or the alternative is to wait for the house of cards to collapse and start over.
- outworlder 5y ago
  That's all done on purpose. https://www.youtube.com/watch?v=rStL7niR7gs https://www.youtube.com/watch?v=rStL7niR7gs
ascagnel_ 5y ago
As other commenters have noted, the SEC doesn't have the power to bring criminal complaints; however, they do frequently refer such cases to the DoJ, which is in the process of bringing criminal complaints against three of the conspirators.
pmoriarty 5y ago
Even if they did go to jail they'd likely get a short stint at a minimum security country club. Meanwhile someone stealing a pack of chewing gum from a convenience store might get shot, and someone stealing a $500 TV could wind up serving hard time in a prison where they might get raped, tortured, or murdered.

wnevets 5y ago

God forbid if you steal a pack of gum, have an oz of weed or write a bad check though.

jmacd 5y ago

I saw the name Rauch and my heart sank! Thank goodness it didn't go the way I thought it did for a second there.

gamblor956 5y ago

In 2020, SCOTUS decided to limit the SEC's ability to impose disgorgement of profits sanctions, see Liu v SEC. https://www.supremecourt.gov/opinions/19pdf/18-1501_8n5a.pdf https://www.supremecourt.gov/opinions/19pdf/18-1501_8n5a.pdf. The rationale behind the decision was that disgorgement imposed joint and several liability rather than individual liabiity, and that disgorgement didn't take into account business expenses incurred in acquiring the illegally acquired income... So now, the SEC has to determine disgorgement sanctions on a per-defendant basis, rather than assessing it as a single joint amount and making the wrong-doers go after each other for reimbursements. Note though that the $700k are just the fines, not the disgorgement sanction, which will presumably be issued soon. (The $700k penalties are not treated as deductible expenses, so they're effectively on top of whatever disgorgement is ordered.)

akomtu 5y ago

That's some ultrasmall fish right there. Just weeks ago Pelosi's husband made a few millions off timely bought MSFT call options, right before Pelosi gave MS a gov contract. In their case is very legal because high rank gov figures are exempt from the insider trading law.