5 ms·

Read it again. He didn't hear a "rumor". He got it direct from a manager involved in the acquisition. Nothing in business is certain, but he knew that the acqui

by not2b 3y ago

Read it again. He didn't hear a "rumor". He got it direct from a manager involved in the acquisition. Nothing in business is certain, but he knew that the acquisition was highly likely. Then he used the account of a relative (doesn't say he tipped off the relative, says he used the account), to hide his involvement most likely. If the SEC didn't have a strong case he wouldn't have settled so quickly.

rKarpinski 3y ago
> If the SEC didn't have a strong case he wouldn't have settled so quickly. No one wants to fight the federal government wether they are guilty or not. "Forbes lists Bechtolsheim's net worth at somewhere north of $16 billion. The SEC fine is less than 0.006 percent of his holdings." I'd settle immediately too. 900k fine or 400k illicit gains means nothing if you are worth 16B.
- kirubakaran 3y ago
  "I'd settle immediately too. 900k fine or 400k illicit gains means nothing if you are worth 16B." > [Andy] has also agreed to be barred from serving as an officer or director of a public company for five years Do you think that means nothing?
  - StefanBatory 3y ago
    For five years that feels like nothing major, in fact. He can still use his connections and return after that time, not there but somewhere for sure.
  - toyg 3y ago
    You don't need to be a director to make money. He's not barred from being an investor.
  - rKarpinski 3y ago
    > Do you think that means nothing? It means nothing. He's 68 years old and worth 16B. The book "Den Of Thieves" (also about insider trading) makes a good case for why you don't want to fight the federal government, even when you can.
  - godelski 3y ago
    > Do you think that means nothing? Yes. Even as other commenters have pointed out his age, let's be realistic at what $1B is (let alone 16!) Suppose you have an interest rate of 5% over the year. That's a pretty safe level and I'm sure he gets more. That means you're getting $50m for doing nothing (passive income), or just under $137k/day (overly simplified calculation based on yearly return divided by 365. No compounding, so consider lower bound). Try spending that much money a day! Then consider trying to spend that much money AFTER you've already bought a few nice homes, cars, and hell throw in a private jet (cheap is a few million, most are 10-20, and Elon's is $78M[0]). (At 16B, you're closer to $800m/yr or $2.19m/day!!!! $900k in fines isn't even half a day's "sitting on his ass doing nothing" for him, let alone work. [1]) The thing that often baffles me is why these people still work. You can do almost anything you want with that kind of money. But I think this also says something about money, power, and how these people think. It also makes me wonder why people get mad at tech workers with our high salaries (definitely not complaining!). Maybe I just don't understand business (I'm a researcher, not a MBA, so assume this is correct). But I just don't see how these salaries do anything for these people other than be a high score. The only way I can personally think of spending $10m in a year is by buying a house and I can't imagine wanting more than 2 (and even a $10m house is often too big! In most locations. Yes, I'm aware SF exists). I just wonder, can't you undercut everyone by taking a lower salary? Which would increase the company value? Or stop pushing deadlines so fast so there's higher quality? Or many other things because there's a ton of C-suit execs getting these salaries. I just don't understand, why work? I have to imagine, a key part must be addiction. Which I can get, I like a fair amount of work, but would rather take money to work as I see fit (but I guess they get this. But you're not at the technical level and personally (thus, highly biased) I find it is far less fun managing people). I think there's a real disconnect. In how we see billionaires, how they see us, and how they see themselves. That money is just an insane level. fwiw, I'm not even against billionaires. I just don't understand why once people have $100m they don't pull a Anderson or John Bogle. Because money isn't real anymore. Edit: let's add some nice numbers at this 5% rate. If you have $20m invested (earning that 5%) you're going to make $1m/yr for life. $100m gets you $5m/yr and $500m gets you $25m/yr. 10B gets you 500M, and $20B means you're a forever billionaire. Looking at Forbe's list, we got Bernard Arnault, Bezos, Musk, Zuckerberg, and Ellison (in order). That's $11.3B/yr ($31m/day), $9.9B/yr ($27.1M/day), $9.9B/yr ($27.1M/day (nearly tied)), $8.6B/yr ($23.7M/day), and $7.75B/yr ($21.2M/day) respectively. With $7.3B you make the $1M/day, which makes you the 367th richest person in the world. [0] https://www.scmp.com/magazines/style/celebrity/article/3198319/inside-elon-musks-new-us78-million-gulfstream-g700-private-jet-twitter-ceos-plane-arriving-2023-has https://www.scmp.com/magazines/style/celebrity/article/31983... [1] (edit add) Let's say that's half a day's work for you and you're a L4 at Google. Using Levels.fyi data, you got a base salary around $178k/yr and so this is equivalent to you dropping $200 ($320 if you include equity) if compared to his passive income alone (which again, is probably >5%). Let that sink in. Technically it is even less than you should value that $200 because he doesn't need to save anything. [2] If some billionaire wants to drop $50m on me, I'll go live my life reading math books, buy a B200 node (maybe even 2! Or a few more!), and research AGI for the rest of my life. I mean I'll also do that for a lot less too, but hey, that's 2 days of nothing for you Elon or Bezos. I'm sure it is worth more than that in publicity alone. ;)
- JKCalhoun 3y ago
  Wild. It's as though if I were rich enough I could run around robbing banks, just give the money back and a fine if I get caught.
  - grugagag 3y ago
    A special class of robbers for sure. Some may even call it parasitism and it wouldnt be easy to disagree unless looked at it from an awkward distorted angle where it could look justified..
purpleblue 3y ago
Why didn't he get jail time like other insider traders?
- xadhominemx 3y ago
  Insider trading is not illegal; providing a material benefit to (paying) someone to provide you inside information and then using that to insider trade is illegal. There is some ambiguity about the definition of a "material benefit" - does that include friendship? Advice? Soft promises of future business arrangements? I assume the government didn't have a 100% solid angle on that element of the crime.
  - nyokodo 3y ago
    > Insider trading is not illegal Trading based on non-public material information is what is meant by Insider Trading and it absolutely is illegal. [1] 1. https://www.investor.gov/introduction-investing/investing-basics/glossary/insider-trading https://www.investor.gov/introduction-investing/investing-ba...
    - maxlybbert 3y ago
      Insider trading requires material nonpublic information, but it also requires somebody violate a fiduciary duty. From the page you linked to (emphasis added): > Illegal insider trading refers generally to buying or selling a security, in breach of a fiduciary duty or other relationship of trust and confidence, on the basis of material, nonpublic information about the security.
      - fragmede 3y ago
        > or other relationship of trust and confidence It seems the SEC is going after him with the latter clause. His long time business contact gave him sensitive non-public information, and he should have known better than to trade on it, because it was so sensitive and who it came from, a long time relationship of trust and confidence. FTA: > We allege that Bechtolsheim, while serving as the chairman of a publicly traded company, abused the trust of a longtime business contact who had shared highly sensitive information about an imminent corporate acquisition," said SEC market abuse unit chief Joseph G Sansone.
tptacek 3y ago
That's not quite true. He was contacted by a manager at a firm that did not buy Acacia, accurately surmised they were in play, and bought in.

by not2b 3y ago

rKarpinski 3y ago

> If the SEC didn't have a strong case he wouldn't have settled so quickly. No one wants to fight the federal government wether they are guilty or not. "Forbes lists Bechtolsheim's net worth at somewhere north of $16 billion. The SEC fine is less than 0.006 percent of his holdings." I'd settle immediately too. 900k fine or 400k illicit gains means nothing if you are worth 16B.

kirubakaran 3y ago
"I'd settle immediately too. 900k fine or 400k illicit gains means nothing if you are worth 16B." > [Andy] has also agreed to be barred from serving as an officer or director of a public company for five years Do you think that means nothing?
- StefanBatory 3y ago
  For five years that feels like nothing major, in fact. He can still use his connections and return after that time, not there but somewhere for sure.
- toyg 3y ago
  You don't need to be a director to make money. He's not barred from being an investor.
- rKarpinski 3y ago
  > Do you think that means nothing? It means nothing. He's 68 years old and worth 16B. The book "Den Of Thieves" (also about insider trading) makes a good case for why you don't want to fight the federal government, even when you can.
- godelski 3y ago
  > Do you think that means nothing? Yes. Even as other commenters have pointed out his age, let's be realistic at what $1B is (let alone 16!) Suppose you have an interest rate of 5% over the year. That's a pretty safe level and I'm sure he gets more. That means you're getting $50m for doing nothing (passive income), or just under $137k/day (overly simplified calculation based on yearly return divided by 365. No compounding, so consider lower bound). Try spending that much money a day! Then consider trying to spend that much money AFTER you've already bought a few nice homes, cars, and hell throw in a private jet (cheap is a few million, most are 10-20, and Elon's is $78M[0]). (At 16B, you're closer to $800m/yr or $2.19m/day!!!! $900k in fines isn't even half a day's "sitting on his ass doing nothing" for him, let alone work. [1]) The thing that often baffles me is why these people still work. You can do almost anything you want with that kind of money. But I think this also says something about money, power, and how these people think. It also makes me wonder why people get mad at tech workers with our high salaries (definitely not complaining!). Maybe I just don't understand business (I'm a researcher, not a MBA, so assume this is correct). But I just don't see how these salaries do anything for these people other than be a high score. The only way I can personally think of spending $10m in a year is by buying a house and I can't imagine wanting more than 2 (and even a $10m house is often too big! In most locations. Yes, I'm aware SF exists). I just wonder, can't you undercut everyone by taking a lower salary? Which would increase the company value? Or stop pushing deadlines so fast so there's higher quality? Or many other things because there's a ton of C-suit execs getting these salaries. I just don't understand, why work? I have to imagine, a key part must be addiction. Which I can get, I like a fair amount of work, but would rather take money to work as I see fit (but I guess they get this. But you're not at the technical level and personally (thus, highly biased) I find it is far less fun managing people). I think there's a real disconnect. In how we see billionaires, how they see us, and how they see themselves. That money is just an insane level. fwiw, I'm not even against billionaires. I just don't understand why once people have $100m they don't pull a Anderson or John Bogle. Because money isn't real anymore. Edit: let's add some nice numbers at this 5% rate. If you have $20m invested (earning that 5%) you're going to make $1m/yr for life. $100m gets you $5m/yr and $500m gets you $25m/yr. 10B gets you 500M, and $20B means you're a forever billionaire. Looking at Forbe's list, we got Bernard Arnault, Bezos, Musk, Zuckerberg, and Ellison (in order). That's $11.3B/yr ($31m/day), $9.9B/yr ($27.1M/day), $9.9B/yr ($27.1M/day (nearly tied)), $8.6B/yr ($23.7M/day), and $7.75B/yr ($21.2M/day) respectively. With $7.3B you make the $1M/day, which makes you the 367th richest person in the world. [0] https://www.scmp.com/magazines/style/celebrity/article/3198319/inside-elon-musks-new-us78-million-gulfstream-g700-private-jet-twitter-ceos-plane-arriving-2023-has https://www.scmp.com/magazines/style/celebrity/article/31983... [1] (edit add) Let's say that's half a day's work for you and you're a L4 at Google. Using Levels.fyi data, you got a base salary around $178k/yr and so this is equivalent to you dropping $200 ($320 if you include equity) if compared to his passive income alone (which again, is probably >5%). Let that sink in. Technically it is even less than you should value that $200 because he doesn't need to save anything. [2] If some billionaire wants to drop $50m on me, I'll go live my life reading math books, buy a B200 node (maybe even 2! Or a few more!), and research AGI for the rest of my life. I mean I'll also do that for a lot less too, but hey, that's 2 days of nothing for you Elon or Bezos. I'm sure it is worth more than that in publicity alone. ;)
JKCalhoun 3y ago
Wild. It's as though if I were rich enough I could run around robbing banks, just give the money back and a fine if I get caught.
- grugagag 3y ago
  A special class of robbers for sure. Some may even call it parasitism and it wouldnt be easy to disagree unless looked at it from an awkward distorted angle where it could look justified..

purpleblue 3y ago

Why didn't he get jail time like other insider traders?

xadhominemx 3y ago
Insider trading is not illegal; providing a material benefit to (paying) someone to provide you inside information and then using that to insider trade is illegal. There is some ambiguity about the definition of a "material benefit" - does that include friendship? Advice? Soft promises of future business arrangements? I assume the government didn't have a 100% solid angle on that element of the crime.
- nyokodo 3y ago
  > Insider trading is not illegal Trading based on non-public material information is what is meant by Insider Trading and it absolutely is illegal. [1] 1. https://www.investor.gov/introduction-investing/investing-basics/glossary/insider-trading https://www.investor.gov/introduction-investing/investing-ba...
  - maxlybbert 3y ago
    Insider trading requires material nonpublic information, but it also requires somebody violate a fiduciary duty. From the page you linked to (emphasis added): > Illegal insider trading refers generally to buying or selling a security, in breach of a fiduciary duty or other relationship of trust and confidence, on the basis of material, nonpublic information about the security.
    - fragmede 3y ago
      > or other relationship of trust and confidence It seems the SEC is going after him with the latter clause. His long time business contact gave him sensitive non-public information, and he should have known better than to trade on it, because it was so sensitive and who it came from, a long time relationship of trust and confidence. FTA: > We allege that Bechtolsheim, while serving as the chairman of a publicly traded company, abused the trust of a longtime business contact who had shared highly sensitive information about an imminent corporate acquisition," said SEC market abuse unit chief Joseph G Sansone.

tptacek 3y ago

That's not quite true. He was contacted by a manager at a firm that did not buy Acacia, accurately surmised they were in play, and bought in.