3 ms·

Genuine question, what stops executives from scheduling stock-tanking announcements to align with their stock-selling schedule?

by jdiff 3y ago

tomjakubowski 3y ago
I don't know, but one guess: maybe sticking to a stock-selling schedule isn't enough to steer clear of insider trading.
bmitc 3y ago
That's still considered inside trading, but as far as I can tell, nothing prevents it. Inside trading seems rampant and completely unenforced unless you're a regular Joe or Martha Stewart.
- FateOfNations 3y ago
  And really with Martha Stewart, it wasn't the insider trading, it was lying about insider trading.
  - deleted 3y ago
    [deleted]
- blululu 3y ago
  Perhaps you run in more criminally inflected circles, but I have never seen anyone committing insider trading, and if I did, I would be more than happy to report it to the SEC. Insider trading is a crime that is definitely enforced and comes with serious consequences. The SEC regularly publishes a list of people who have been convicted and it made a record number of convictions last year (nothing surprising since the population keeps growing). Martha Stewart was not exceptional. She was convicted because she committed crimes.
  - bmitc 3y ago
    > Perhaps you run in more criminally inflected circles, but I have never seen anyone committing insider trading, and if I did, I would be more than happy to report it to the SEC. I don't appreciate the linking you've done there. I do not condone or participate in insider trading nor do I personally know anyone who does. I actually want it regulated and prosecuted much more strictly. > The SEC regularly publishes a list of people who have been convicted and it made a record number of convictions last year How many of those are CEOs, executives, or board members at large corporations or politicans? The point being that powerful and wealthy people can often get away with it. See Musk's market manipulation. The entire point of my comment and the one I replied to was to point put the several loopholes that very probably allow rampant insider trading. I would even go so far as to question whether CEOs, executives, and board members should even be allowed to own stock in their company and related industries given the level of conflict of interest. Certified accountants can't even hold the broadest of broad market ETFs in an IRA if the ETF is even tacitly related to a client. In other words, any trading done by top-level management at major corporations is likely technically insider trading.
deleted 3y ago
[deleted]
AlotOfReading 3y ago
There's an explicit rule about this: https://en.wikipedia.org/wiki/SEC_Rule_10b5-1 https://en.wikipedia.org/wiki/SEC_Rule_10b5-1
brucethemoose2 3y ago
> stock-tanking announcements Plausible deniability. Can the FTC show company leadership knew the announcement would be a "stock tanking" one? After all, why would they intentionally do that? Price increases are positive announcements for many companies.

Genuine question, what stops executives from scheduling stock-tanking announcements to align with their stock-selling schedule?

by jdiff 3y ago

Genuine question, what stops executives from scheduling stock-tanking announcements to align with their stock-selling schedule?

tomjakubowski 3y ago

I don't know, but one guess: maybe sticking to a stock-selling schedule isn't enough to steer clear of insider trading.

bmitc 3y ago

That's still considered inside trading, but as far as I can tell, nothing prevents it. Inside trading seems rampant and completely unenforced unless you're a regular Joe or Martha Stewart.

FateOfNations 3y ago
And really with Martha Stewart, it wasn't the insider trading, it was lying about insider trading.
- deleted 3y ago
  [deleted]
blululu 3y ago
Perhaps you run in more criminally inflected circles, but I have never seen anyone committing insider trading, and if I did, I would be more than happy to report it to the SEC. Insider trading is a crime that is definitely enforced and comes with serious consequences. The SEC regularly publishes a list of people who have been convicted and it made a record number of convictions last year (nothing surprising since the population keeps growing). Martha Stewart was not exceptional. She was convicted because she committed crimes.
- bmitc 3y ago
  > Perhaps you run in more criminally inflected circles, but I have never seen anyone committing insider trading, and if I did, I would be more than happy to report it to the SEC. I don't appreciate the linking you've done there. I do not condone or participate in insider trading nor do I personally know anyone who does. I actually want it regulated and prosecuted much more strictly. > The SEC regularly publishes a list of people who have been convicted and it made a record number of convictions last year How many of those are CEOs, executives, or board members at large corporations or politicans? The point being that powerful and wealthy people can often get away with it. See Musk's market manipulation. The entire point of my comment and the one I replied to was to point put the several loopholes that very probably allow rampant insider trading. I would even go so far as to question whether CEOs, executives, and board members should even be allowed to own stock in their company and related industries given the level of conflict of interest. Certified accountants can't even hold the broadest of broad market ETFs in an IRA if the ETF is even tacitly related to a client. In other words, any trading done by top-level management at major corporations is likely technically insider trading.

deleted 3y ago

[deleted]

AlotOfReading 3y ago

There's an explicit rule about this: https://en.wikipedia.org/wiki/SEC_Rule_10b5-1 https://en.wikipedia.org/wiki/SEC_Rule_10b5-1

brucethemoose2 3y ago

> stock-tanking announcements Plausible deniability. Can the FTC show company leadership knew the announcement would be a "stock tanking" one? After all, why would they intentionally do that? Price increases are positive announcements for many companies.