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Yes, we are a free-market. But there are people, like company executives (and high-ranking politicians) who have non-public information that does not belong to
by gimmeThaBeet 5y ago
Yes, we are a free-market. But there are people, like company executives (and high-ranking politicians) who have non-public information that does not belong to them. When congress uses insider knowledge, they are stealing from the ameria, and undermining any semblance of policy integrity.
And for that reason, the SEC has 10b-5 plans, which can certainly be critiqued, but at least removes the low-hanging fruit like "we are getting acquired so I'll buy as many shares and out of the money options as I can".
Iirc her husband was basically buying fairly far-out (~16-18 months) calls at the onset of the pandemic, and they were expiring around the time of, was it an antitrust hearing? The timing itself was poor, but the expiration didn't seem diabolical.
But it was just like, c'mon, I don't even like the anti-trust bent congress is on, but how are you thinking people are taking your goals in good faith when you have any explicit (and intrinsically timed) personal interest in not harming the businesses you are looking into anti-trust action against?
The Fed trading ethics thing with Kaplan and Rosengren was also pretty bad. But imo, they made real changes. They restricted a lot of individual trading, and anything they can still trade in, has to be requested 45 days in advance. I think they understood the gravity of what that said about them, and took real steps to remedy.
The STOCK Act otoh says Congress and employees have to report within 45 days...
- erect_gacker5 5y ago[dead]
- JumpCrisscross 5y ago> STOCK Act otoh says Congress and employees have to report within 45 days Why does advance disclosure prevent insider trading differently from post-trade disclosure? Both permit similar forms of enforcement.
- throwawayboise 5y agoIn an era of HFT, 45 days might as well be 10 years.
- JumpCrisscross 5y ago> an era of HFT, 45 days might as well be 10 years Sorry, I thought the problem was corruption. Not market makers getting run over. If it’s the former, the delay is irrelevant. If it’s the latter…why?
- jedberg 5y agoAdvance disclosure prevents insider trading because it makes it unprofitable. If everyone knows you have insider information and what your sales plan is, it's no longer insider information because your sales plan telegraphs what you know, and now everyone else can trade on that information too.
- gimmeThaBeet 5y agoThe argument is like jedberg describes, if you have to disclose your trades far ahead of time, does having inside information matter? Make them plan far enough ahead that it's ineffective. To me, the thing you are trying to curb is the short latency. You don't want, let's say...the head of the senate intelligence committee talking about how prepared america is for pandemics, and then turning around and selling a bunch equities. Or, calling his brother in law for less than a minute, directly after which he calls his broker. Imo, it's the difference between, "disclose your plans, providing an opportunity for questions and looking for ethical red flags" and, "seeing the transactions after the fact, after which the people always say, 'nah, nah my guy, you got it all wrong, I already planned to make these trades, or it had nothing to do with the non-public information I had access to ;)"
- mbesto 5y ago> Yes, we are a free-market Honestly - no we (America) are not. A free market would have: - Let all of the major banks fail - No (or limited) Federal Reserve - Disallowed the various regulatory capture (Foxconn's building in WI, Intuit's stronghold on pay taxes, etc. etc.) - AT&T wouldn't have been broken up - etc. etc.
- chrstphrknwtn 5y agoAlso, various industries would never be subsidised; automotive production in the US would have disappeared decades ago in a truly free market.
- nickff 5y agoIt might have been re-organized with a different cost-structure and different product portfolio, though I agree that the 'big three' would not exist in their current form.
- pottertheotter 5y agoI agree that we don't have a free market, but how do you get to "AT&T wouldn't have been broken up" as evidence of that? It's exactly the opposite.
- Dracophoenix 5y agoIn this hypothetical laissez-faire USA, AT&T would not have been granted a monopoly to begin with (what allowed the company to metastasize into Ma Bell) in addition to not having been broken up so long as any monopoly AT&T achieved (or failed to achieve) was accomplished on its own merits. Thus the previous post is technically correct about the outcome, but probably for the wrong reasons (i.e. failing to account that Ma Bell itself was not a product of the free market)
- mbesto 5y agoI'm the parent - I agreed with pretty much everything you said.