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Information asymmetry is a fundamental, unavoidable feature of the markets. It’s not illegal for me to pay Visa and Mastercard for an exclusive deal to access

by prvit 4y ago

Information asymmetry is a fundamental, unavoidable feature of the markets. It’s not illegal for me to pay Visa and Mastercard for an exclusive deal to access transaction flow and trade on the basis of that information. I will in fact be trading based on material nonpublic information, but not in the sense the law forbids.

selectodude 4y ago
Uh, you sure? >The Securities and Exchange Commission announced today that it charged Bonan Huang and Nan Huang (the "Defendants") with engaging in illegal insider trading on the basis of material, non-public information about the sales of predominantly consumer retail corporations. >In its complaint filed in the federal court in the Eastern District of Pennsylvania on January 21, 2015, the SEC alleges that the Defendants worked for a large credit card issuer as data analysts tasked with investigating fraudulent credit card activity. While employed there, Defendants searched their employer's nonpublic database that recorded the credit card activity for millions of customers at numerous, predominantly consumer retail corporations. The Defendants conducted hundreds, if not thousands, of keyword searches of this database. These searches, which were not done in furtherance of their employment duties, allowed the Defendants to view and analyze aggregated sales data for the companies they searched. The complaint further alleges that, in a breach of their duty to their employer, the Defendants made profitable securities transactions on the basis of this material, non-public information in advance of the public release of quarterly sales announcements by these companies. https://www.sec.gov/litigation/litreleases/2015/lr23179.htm https://www.sec.gov/litigation/litreleases/2015/lr23179.htm
- prvit 4y ago
  Yes, I’m sure. What you pasted is perfectly in line with what I said. Those guys did a bad thing because they deprived their employer of the opportunity to profit from this data.

by prvit 4y ago

selectodude 4y ago

Uh, you sure? >The Securities and Exchange Commission announced today that it charged Bonan Huang and Nan Huang (the "Defendants") with engaging in illegal insider trading on the basis of material, non-public information about the sales of predominantly consumer retail corporations. >In its complaint filed in the federal court in the Eastern District of Pennsylvania on January 21, 2015, the SEC alleges that the Defendants worked for a large credit card issuer as data analysts tasked with investigating fraudulent credit card activity. While employed there, Defendants searched their employer's nonpublic database that recorded the credit card activity for millions of customers at numerous, predominantly consumer retail corporations. The Defendants conducted hundreds, if not thousands, of keyword searches of this database. These searches, which were not done in furtherance of their employment duties, allowed the Defendants to view and analyze aggregated sales data for the companies they searched. The complaint further alleges that, in a breach of their duty to their employer, the Defendants made profitable securities transactions on the basis of this material, non-public information in advance of the public release of quarterly sales announcements by these companies. https://www.sec.gov/litigation/litreleases/2015/lr23179.htm https://www.sec.gov/litigation/litreleases/2015/lr23179.htm

prvit 4y ago
Yes, I’m sure. What you pasted is perfectly in line with what I said. Those guys did a bad thing because they deprived their employer of the opportunity to profit from this data.