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If you found out about such a ring and got visibility into what they were doing, and used what you discovered to profit at their expense (without doing any of y
by ncmncm 5y ago
If you found out about such a ring and got visibility into what they were doing, and used what you discovered to profit at their expense (without doing any of your own manipulations, i.e. just buying and selling), would you be in trouble?
- kube-system 5y agoI suspect that if you knew about the scheme, and executed trades as a result of that knowledge, you would probably run afoul of this?: https://www.law.cornell.edu/uscode/text/18/1348 https://www.law.cornell.edu/uscode/text/18/1348
- ceejayoz 5y agoNo, you wouldn't be executing the fraud. Reading the statute that way would make companies like https://en.wikipedia.org/wiki/Hindenburg_Research https://en.wikipedia.org/wiki/Hindenburg_Research illegal.
- ElevenLathe 5y agoMatt Levine said it best: "Everything everywhere is securities fraud." https://www.bloomberg.com/opinion/articles/2019-06-26/everything-everywhere-is-securities-fraud https://www.bloomberg.com/opinion/articles/2019-06-26/everyt...
- IAmEveryone 5y agoYou can’t take it literally in this sense. Among other things, investors cannot commit securities fraud, only executives can. Als, relatedly, Matt Levine’s take regarding insider trading may be relevant here.
- kube-system 5y ago> investors cannot commit securities fraud, only executives can. The very story you're commenting on is an example of a securities fraud scheme (pump and dump) that can be committed by investors.
- dmurray 5y agoThis definitely isn't true. Anyone lying to you in connection with a sale of securities in return for financial gain is committing securities fraud. According to any reasonable reading of the statute books, or any of hundreds of insider trading cases that do not involve executives.
- kube-system 5y agoAh, fair enough. I guess it would come down to the particular circumstance in which you were made aware?, i.e: https://www.law.cornell.edu/uscode/text/18/371 https://www.law.cornell.edu/uscode/text/18/371 Either way, I wouldn't be comfortable touching either situation with a 20 foot pole.
- ceejayoz 5y ago> Either way, I wouldn't be comfortable touching either situation with a 20 foot pole. This is the right call, I think.
- elliekelly 5y agoThey make the alleged fraud public though, do they not? The comment you’re replying to seems to suggest a strategy of intentional non-disclosure. I think that’s a material difference when it comes to analyzing the legality of those two approaches.
- twoodfin 5y agoYou’d probably be better off reporting them under Dodd-Frank whistleblower provisions. These apply not just to insiders reporting fraud, but also independent analysis which use[s] the publicly available materials to show important insights about the possible securities laws violations that are not apparent from the face of the materials https://www.sec.gov/page/frequently-asked-questions-whistleblower-rule-amendments https://www.sec.gov/page/frequently-asked-questions-whistleb...
- ncmncm 5y agoObviously you would do that too. But Bernie showed us how much good reporting people does.
- cbtacy 5y agoIf you found out about such a ring, got visibility into what they were doing, and didn't immediately seek competent legal advice - you would be an idiot.
- hderms 5y agoI'm guessing the answer to this question is predominantly determined by the price of your lawyer.