3 ms·

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.
  - xadhominemx 3y ago
    No, it is not. You seem very confident about this, which is concerning because you are incorrect.

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.
- xadhominemx 3y ago
  No, it is not. You seem very confident about this, which is concerning because you are incorrect.