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> People who do it are just complete idiots. Exactly this. Especially in the 21st century world of big data, ML algorithms and all that jazz. The closer you a

> People who do it are just complete idiots. Exactly this. Especially in the 21st century world of big data, ML algorithms and all that jazz. The closer you are to the action, the higher the chances of getting caught. If you work for a finance firm, its pretty much guaranteed you'll be caught. Firms are hot on it and they take all sorts of layered measures to prevent it and stamp it out. If you work for a finance firm, in most cases its actually harder to obtain the insider information in the first place than it is to act on it as a PA trade. One of the most well funded and well-staffed departments in any finance firm is the compliance department and they have the power to kill your career instantly (you'll get escorted from the office the moment they suspect anything, forced to stay at home on gardening leave whilst they investigate and then once that's over - and assuming it doesn't go legal - you'll find nobody in finance will employ someone who was sacked for compliance reasons). If you work for a listed company, then like these guys eventually found out, you'll be caught. A bit of data mining at the SEC will soon weed out transactions made by people who likely knew what was going on before the public did. All this hard work on compliance makes the stockmarket one of the most even playing fields there is for investors, because the work of the SEC and other regulators around the world is there to ensure John Doe has the same chances as Warren Buffet to make money on the stockmarket. (Yes, the world of HFT is a bit different with their technological edge, but that's another story).

fhood 5y ago
Having recently left a fintech job for just a normal tech job I was surprised to find that 4 hours of mandatory insider trading training was not the standard.
- traceroute66 5y ago
  Interesting. How far removed were you from regulated activities ? Did your firm and/or role have a retail facing element or only institutional ? Most places I know of would not only have the sort of induction training you imply, but regular refreshers for anyone involved in regulated or at-risk activities.
  - fhood 5y ago
    We had the refreshers as well. We theoretically had access to fairly extensive private data. Not without leaving a pretty extensive paper trail, but the access was there.
- nostrademons 5y ago
  Mandatory insider trading training is required at my FAANG employer. I think it's 1-2 hours rather than 4 hours, but still substantial.
paulpauper 5y ago
All this hard work on compliance makes the stockmarket one of the most even playing fields there is for investors, because the work of the SEC and other regulators around the world is there to ensure John Doe has the same chances as Warren Buffet to make money on the stockmarket. (Yes, the world of HFT is a bit different with their technological edge, but that's another story). When Warren Buffet bought financial stocks in 2008-2009 the deals were done in such a way he could not lose money easily, or at least had a much lower chance than any ordinary investor.
- traceroute66 5y ago
  > When Warren Buffet bought financial stocks in 2008-2009 the deals were done in such a way he could not lose money easily, or at least had a much lower chance than any ordinary investor. Isn't one of his great sayings "be greedy when others are fearful" ? IIRC the market didn't have much lower to go in 2008-2009 so if he bought at (or close enough) to "the bottom" then he wasn't really taking on much risk anyway. Did it myself last year when COVID started and the market plummeted. Went on a shopping spree with some spare cash I had, lots of decent shares being effectively sold at a discount, all you had to do was "be greedy when others were fearful" ... pick something up at a 20%+ discount and then just sit and wait (and be prepared to wait a few months to a year). And with COVID it was pretty clear that as long as it wasn't an airline or hospitality stock, the odds would be in your favour.
  - whoaisme 5y ago
    You didn't do it yourself. You have no idea what you're talking about in terms of the sweetheart deals Buffett got in return for his capital. The fact that you're patting yourself on the back for doing the same thing as Buffett is so laughable it reflects hilariously poorly on you.
  - carnitine 5y ago
    Your comment is totally irrelevant. Buffet bought equity off the exchanges in structured deals. That isn’t possible for a retail investor.
w4llstr33t 5y ago
I was going to mention HFT. How is it a level playing field when they are in the picture? Paying top dollar just to be closer and closer to the exchanges to get the fastest, "best price", when really, they have info before anyone else. Also, what about dark pools? Contrary to my username, which I just get a kick out of, I don't actually work on wall street or anything, but I've always felt the stock market was rigged for the elite. I think it is very likely that they have info before normal retail investors have any idea.
- amznthrwaway 5y ago
  HFT provides a value-adding service to retail. They replaced market-makers (who provided liquidity with huge spreads) with algos that have incredibly small spreads. Dark pools aren’t pernicious either, it’s just another place you can buy or sell things, and then immediately have the trade reported with the rest of the sales data. Not materially different from the dozens of other places to buy and sell.
- traceroute66 5y ago
  > I was going to mention HFT. How is it a level playing field when they are in the picture? Paying top dollar just to be closer and closer to the exchanges to get the fastest, "best price", when really, they have info before anyone else. Apologies if my post implied insider knowledge on the part of HFTs. That's not the case. The point I was making is their model is ONLY viable if they have the best mathematical brains, the best computing power, the best connectivity. If anything in that fragile chain is broken then their model is unviable. In the end, they trade on what is best described as noise. They look for patterns in the noise. And so they need "the best" noise, as soon as instantly as they can get it, and the computing power to process it as close to instantly as possible. I called it "another story" because its a truly nuts way of making money. ;-) There is an old saying. "Time in a trade is better than timing a trade". HFTs are basically trying to do the latter all day, every day. In my view, John Doe the buy & hold investor actually has the advantage that they can wait for weeks, months or years. Tortoise & Hare and all that ....
- carnitine 5y ago
  HFT is the best thing to ever happen to the average Joe retail investor. They have increased liquidity and price discovery dramatically at a fraction of the cost of the people they replaced.
throwaway0a5e 5y ago
I work in finance. Thank you for the laugh. Compliance is a cost center. The Redditesque fantasy of compliance departments overflowing with resources because the company loves law for the sake of law or thinks that going above and beyond makes you less likely to get screwed than just doing what your lawyers tell you the laws says you need to do are just that, fantasy. Compliance departments get tasked with making the company comply, nothing more, nothing less. And they're mostly given the resources to do that, nothing more nothing less.
- traceroute66 5y ago
  I think that's a little bit too cynical. For a start "company loves law for the sake of law". The company is operating in (a) a highly regulated environment (b) likely wishes to avoid the fines and adverse publicity associated with non-compliance. Its nothing to do with "loving the law". But each to their own interpretation I guess.
  - komali2 5y ago
    Cynicism from a generation that weathered two massive downturns / recessions with almost no real consequences for those responsible is to be expected.
    - throwaway0a5e 5y ago
      >Cynicism from a generation that weathered... I don't disagree in principal but... I called the behavior Redditesque for a reason. Comments portraying regulatory agencies as all-seeing gods ready to smite anyone who dares not display their faith enthusiastically enough let alone materially violate the rules are wildly popular there. Cynical realpolitik takes (e.g. "MHSA will show up and fine you for everything they can while doing nothing to materially improve safety") on regulatory enforcement are very much unaccepted over there. Millennials and gen Z, exactly the people you'd expect to be the most cynical are also over-represented there compared to the general population. So clearly there's some other mechanism at play.
- deleted 5y ago

fhood 5y ago

Having recently left a fintech job for just a normal tech job I was surprised to find that 4 hours of mandatory insider trading training was not the standard.

traceroute66 5y ago
Interesting. How far removed were you from regulated activities ? Did your firm and/or role have a retail facing element or only institutional ? Most places I know of would not only have the sort of induction training you imply, but regular refreshers for anyone involved in regulated or at-risk activities.
- fhood 5y ago
  We had the refreshers as well. We theoretically had access to fairly extensive private data. Not without leaving a pretty extensive paper trail, but the access was there.
nostrademons 5y ago
Mandatory insider trading training is required at my FAANG employer. I think it's 1-2 hours rather than 4 hours, but still substantial.

paulpauper 5y ago

All this hard work on compliance makes the stockmarket one of the most even playing fields there is for investors, because the work of the SEC and other regulators around the world is there to ensure John Doe has the same chances as Warren Buffet to make money on the stockmarket. (Yes, the world of HFT is a bit different with their technological edge, but that's another story). When Warren Buffet bought financial stocks in 2008-2009 the deals were done in such a way he could not lose money easily, or at least had a much lower chance than any ordinary investor.

traceroute66 5y ago
> When Warren Buffet bought financial stocks in 2008-2009 the deals were done in such a way he could not lose money easily, or at least had a much lower chance than any ordinary investor. Isn't one of his great sayings "be greedy when others are fearful" ? IIRC the market didn't have much lower to go in 2008-2009 so if he bought at (or close enough) to "the bottom" then he wasn't really taking on much risk anyway. Did it myself last year when COVID started and the market plummeted. Went on a shopping spree with some spare cash I had, lots of decent shares being effectively sold at a discount, all you had to do was "be greedy when others were fearful" ... pick something up at a 20%+ discount and then just sit and wait (and be prepared to wait a few months to a year). And with COVID it was pretty clear that as long as it wasn't an airline or hospitality stock, the odds would be in your favour.
- whoaisme 5y ago
  You didn't do it yourself. You have no idea what you're talking about in terms of the sweetheart deals Buffett got in return for his capital. The fact that you're patting yourself on the back for doing the same thing as Buffett is so laughable it reflects hilariously poorly on you.
- carnitine 5y ago
  Your comment is totally irrelevant. Buffet bought equity off the exchanges in structured deals. That isn’t possible for a retail investor.

w4llstr33t 5y ago

I was going to mention HFT. How is it a level playing field when they are in the picture? Paying top dollar just to be closer and closer to the exchanges to get the fastest, "best price", when really, they have info before anyone else. Also, what about dark pools? Contrary to my username, which I just get a kick out of, I don't actually work on wall street or anything, but I've always felt the stock market was rigged for the elite. I think it is very likely that they have info before normal retail investors have any idea.

amznthrwaway 5y ago
HFT provides a value-adding service to retail. They replaced market-makers (who provided liquidity with huge spreads) with algos that have incredibly small spreads. Dark pools aren’t pernicious either, it’s just another place you can buy or sell things, and then immediately have the trade reported with the rest of the sales data. Not materially different from the dozens of other places to buy and sell.
traceroute66 5y ago
> I was going to mention HFT. How is it a level playing field when they are in the picture? Paying top dollar just to be closer and closer to the exchanges to get the fastest, "best price", when really, they have info before anyone else. Apologies if my post implied insider knowledge on the part of HFTs. That's not the case. The point I was making is their model is ONLY viable if they have the best mathematical brains, the best computing power, the best connectivity. If anything in that fragile chain is broken then their model is unviable. In the end, they trade on what is best described as noise. They look for patterns in the noise. And so they need "the best" noise, as soon as instantly as they can get it, and the computing power to process it as close to instantly as possible. I called it "another story" because its a truly nuts way of making money. ;-) There is an old saying. "Time in a trade is better than timing a trade". HFTs are basically trying to do the latter all day, every day. In my view, John Doe the buy & hold investor actually has the advantage that they can wait for weeks, months or years. Tortoise & Hare and all that ....
carnitine 5y ago
HFT is the best thing to ever happen to the average Joe retail investor. They have increased liquidity and price discovery dramatically at a fraction of the cost of the people they replaced.

throwaway0a5e 5y ago

I work in finance. Thank you for the laugh. Compliance is a cost center. The Redditesque fantasy of compliance departments overflowing with resources because the company loves law for the sake of law or thinks that going above and beyond makes you less likely to get screwed than just doing what your lawyers tell you the laws says you need to do are just that, fantasy. Compliance departments get tasked with making the company comply, nothing more, nothing less. And they're mostly given the resources to do that, nothing more nothing less.

traceroute66 5y ago
I think that's a little bit too cynical. For a start "company loves law for the sake of law". The company is operating in (a) a highly regulated environment (b) likely wishes to avoid the fines and adverse publicity associated with non-compliance. Its nothing to do with "loving the law". But each to their own interpretation I guess.
- komali2 5y ago
  Cynicism from a generation that weathered two massive downturns / recessions with almost no real consequences for those responsible is to be expected.
  - throwaway0a5e 5y ago
    >Cynicism from a generation that weathered... I don't disagree in principal but... I called the behavior Redditesque for a reason. Comments portraying regulatory agencies as all-seeing gods ready to smite anyone who dares not display their faith enthusiastically enough let alone materially violate the rules are wildly popular there. Cynical realpolitik takes (e.g. "MHSA will show up and fine you for everything they can while doing nothing to materially improve safety") on regulatory enforcement are very much unaccepted over there. Millennials and gen Z, exactly the people you'd expect to be the most cynical are also over-represented there compared to the general population. So clearly there's some other mechanism at play.
deleted 5y ago