Making Insider Trading Legal
newyorker.com
newyorker.com
This quote is interesting. I know that in some countries (including my own,) dealing in stolen goods is in fact illegal, regardless of whether or not you knew the goods were stolen in the first place. The onus lies on the buyer of the goods to remove doubts of where the goods came from, which often amounts to simply asking the reseller for a receipt. If you're given one which is bogus, you can claim ignorance and whoever you bought it from would be guilty of fraud as well as dealing in stolen goods.
Now, I don't know what the law says about dealing in stolen physical goods in the US, but if it's anything like the above then why should illegally obtained information be any different? Shouldn't it be reasonable then to ask whoever is dealing in this information to ask for a receipt, as it were?
(up to 5 years for handling goods that were stolen by somebody else)
[1] https://en.wikipedia.org/wiki/Strict_liability_(criminal)
Simply handling stolen goods is not a criminal offence in Germany.
[1]: https://lagen.nu/1962:700#K9P7S1 (Text in Swedish.)
This wasn't always the case, but I can't quite remember when the law changed. It used to be that you could claim you bought the goods "in good faith" in which case you'd be free of liability unless there were other hard evidence to connect you with the crime – even if you bought that high-end watch off of some dude selling watches on the street out of a cardboard box.
These days however, it's much easier to convict someone (whether selling or buying) because of a clause that includes anyone who didn't know but had reason to believe the goods were stolen. It's easier for the prosecution to prove the latter, and probably gets rid of most "it fell off the back of truck" arguments. That high-end watch from that shady dude on the street would probably get you a fine these days. (Putting people in prison is costly, after all.)
However, if you bought a used watch at a reasonable price with some plausible documentation, this is where things has changed somewhat.
Before, if you had bought the watch in "good faith", i.e. there was no obvious reason for you to suspect it was stolen when you bought it, you were entitled to keep the watch even if it was later found out it was indeed stolen. Even if they later found the previous owner, he wasn't allowed to have it back. He had to go after the thief to get compensation (even if the thief is unknown).
That last thing is what changed. If they find out the watch is indeed stolen, you have to give it back to the previous owner, even if you bought it in "good faith". But you have not committed a crime, you will simply have to give back the goods to the right owner. Now it is you as a buyer that has to go after the thief for compensation (because he scammed you by selling stolen goods).
edit: criminal liability indeed
Which makes the plausible deniability even weaker.
As a private citizen without an army of analysts, you would probably subject their claim to more scrutiny. It sounds like insider trading is only "legal" now if you own a hedge fund.
Insider trading is legal now if you are powerful and wealthy and not an appropriate candidate for some sort of selective enforcement of the laws, it seems.
More realistically, you don't feel the need to ask. They're the expert, not you.
And with the new ruling, all you have to do to keep your actions strictly legal is follow that analyst's advice and not ask any probing follow-up questions.
That said, if you are employed by the company, the work and the product is all owned by them, so there's no reason not to provide all information when asked.
> Insider trading is legal now if you are powerful and wealthy and not an appropriate candidate for some sort of selective enforcement of the laws, it seems.
I think you can replace insider trading in that statement with just about any other criminal act and it's still mostly true, in most parts of the world.
None of that is illegal. Unless you're a micromanager you wouldn't ask why they think that - that's their job.
But these are very thin reeds.
"Suppose I have a business where I get stuff to sell on a 'don't ask, don't tell basis', that would be totally legal and no one would complain..." sure
"It's just information, information shouldn't be property"
--> Any employer has information they want private. If someone there was no overt law against spilling out one's employer's private information, it would certainly be a condition of employment. And intentionally doing anything that is - against your condition of employment and costs your employer millions of dollars, is going to wind in serious civil trouble. That state has decided to make this criminal also is entirely logical.
If a shop foreman takes money to shut down a factory for a day to benefit a revival, he would be guilty of theft without "shutting down a factory" being an otherwise criminal activity.
The fundamental thing is taking money from someone, which insider trading certainly does. Those who buy a stock on an insider get money - meaning those who sold the stock lose it.
This is definitely not true; those who buy a stock on inside information are buying from people who independently decided it was a good time to sell their stock. Those people are likely, in the counterfactual universe, to sell their stock anyway.
And while a shop foreman might be guilty of theft for shutting down a shop in response to a bribe (I find this a little unlikely, but won't express further opinion than that), the money which changes hands can't be relevant to that, since the theft would be from the factory owner or operator, while the money comes from a completely different source.
+ Consider the person trading in insider information, namely that Cogswell's Cosmic Cogs has agreed to buy Spacely Space Sprockets at $12/share. Someone with stock in Spacely Space Sprockets would likely chose not to sell at the current market rate of $9.25/share if they knew that.
This doesn't follow at all. Trades happen all the time between people with the same information. Under your theory, that's impossible.
It's also not particularly relevant to the main point. The idea of banning insider trading isn't to reflect inside knowledge in the price instantly -- that would be accomplished by encouraging insider trading. The idea is to prevent people with inside knowledge from trading. People who sell to someone trading on inside knowledge get a little bit more money (due to higher demand) than they otherwise would have. They miss out on gains that the person with inside knowledge predicted, but that they also miss in the relevant counterfactual (when they sell to someone else with no inside knowledge).
A few end up selling when, in the world without the insider, they wouldn't have. Those people can't be identified and quite plausibly realize the same gain under either scenario, for example, if they have a standing order to sell at X price.
Cute.
[0] http://ypdcrime.com/penal.law/article165.htm#p165.40
EDIT: Wikipedia identifies SAC as being based in CT, which has different laws.
But, there are separate laws for commercial entities who deal in second hand goods (like pawn shops). They must do proper due diligence when buying goods or they will be held accountable if those goods turn out to be stolen.
I would assume that financial firms should also be under extra scrutiny in the same way. But alas, our phony government has made it clear whose side they are on.
Analyzing intent is important to differentiate between people who have likely already learned from their mistake, and those who are likely to exploit others in the future. Punishment is only necessary in the latter case.
It's been an important part of law for a long time, although there's a tendency to explicitly avoid it in legislative efforts in the US since the '60s and the advent of MPC (https://en.wikipedia.org/wiki/Model_Penal_Code)
> "Illegal insider trading refers generally to buying or selling a security, in breach of a fiduciary duty or other relationship of trust and confidence, while in possession of material, nonpublic information about the security."
So if I hack into someone's server and steal a bunch of secret financial data, and use that to trade, then I am trading based on illegally obtained information, but I am not committing insider trading, because I have no fiduciary duty or relationship of trust and confidence.
Conversely, if I'm a director of a company being acquired, and I trade on my knowledge of the acquisition before it is announced, my knowledge was not illegally obtained, but I am violating a fiduciary duty to the company.
As a general rule (there are exceptions!) insider trading never involves illegally obtained information. It's either illegal information I wasn't meant to know, or it's information I was meant to know but wasn't meant to trade on.
(Note that the news recently broke of a Ukrainian hacking group that was stealing unreleased press releases and selling them to traders. Headlines almost universally called the group an "insider trading ring", but what they seem to have committed was wire fraud[1]. The SEC is gamely trying to pin some security fraud charges on them, because that's what the SEC does, but the plain text of the underlying law is against them, and that theory has yet to prevail in court.)
In the Dell/hedge fund case the New Yorker is talking about, it seems clear that the Dell analyst had a fiduciary duty to Dell, although he was never charged with insider trading, probably because he didn't trade. And the hedge fund guys clearly traded, but they didn't have a fiduciary duty to Dell. Nor could prosecutors point to some sort of exchange where the Dell guy swapped insider information with someone who then traded. If the information had been stolen, then it might still have been a crime (even if not insider trading). But apparently, it wasn't stolen.
In short: Insider trading is about trading in violating of a fiduciary duty or a relationship of trust and confidence. It's not about trading based on illegal information. This is true despite the fact that a lot of people sort of think it would make sense if it was otherwise.
[1]: http://www.nytimes.com/2015/08/18/business/dealbook/hacking-...
Edit: A further point of clarification; insider trading law is written to protect a company from the misappropriation of their secrets by insiders for their own benefit. In the example being discussed, it's intended to protect Dell from being harmed by their investor relations guy (Rob Ray, in this case), and it clearly allows the prosecution of Ray if he used Dell's material nonpublic information for his own benefit. Except, in this case, there's no accusation or evidence that he did; he seems to have been trying to use Dell's information for Dell's benefit, and didn't benefit personally at all. That's actually legal. (Well, Dell actually has some rules on what they can let their investor relation's people share, but if those rules were violated then Dell or Ray would be in trouble, not the people they told, and it still wouldn't be insider trading.) But as far as insider trading law goes, the only real possible victim is Dell (it was their information), and the only real possible criminal was Ray, or maaaybe a close relative of Ray, a golf buddy, roomate, etc., or maybe someone who paid Ray to victimise Dell. But Bharara didn't go after Ray or anyone who knew Ray, and he didn't phrase the issue in terms of the damage done to Dell, and that was fundamentally at odds with how insider trading law works.
What Bharara seemed to want is a law that protects small investors from hedge fund traders, not a law that protected Dell from Ray. He's not obviously wrong to want such a law, but he was wrong to think one existed. In any case, keep in mind when discussing insider trading law as it currently stands: It will make ZERO sense unless you remember that it was written to protect Dell from people like Ray, rather than mutual funds from people like Steve Cohen. Even if Dell doesn't really need to be protected from their own investor relation's flaks, and mutual funds really need to be protected from Steve Cohen.
> dealing in stolen goods is in fact illegal,
> regardless of whether or not you knew the goods were
> stolen in the first place
The fundamental error in all cases is to conceptualize insider trading as buying from someone who would have bought/sold anyway. This is precisely failing to think at the margin. It is as erroneous as saying "eating meat is ok because those cows would have been killed anyway". Put more technically, when you buy a share, you do so by shifting up the demand curve a tiny bit, with your demand, which in turn shifts the price slightly up and causes a seller to sell, who would not otherwise have. Market microstructure, together with the fact that supply/demand curves really form a single curve, can obscure this fundamental economic fact.
Given this, insider trading does cause harm to some people. And how could it not? If a person can make money from insider trading, then, to first order, someone else must lose money. There are some externalities from information revelation, but only a tiny fraction of these benefits go to the marginal buyer/seller who lost out because of insider trading.
How does this compare to public releases of information? Well unlike insider trading, public information can shift prices without any transactions occurring (or in practice, very few). This is because while insider trading only moves the price by the mechanism of moving the supply/demand curve, while public information is revealed to all traders at once.
So while insider trading does reveal information (which is a good thing) it does so in a way that reduces liquidity, because people don't want to be on the wrong side of insider trading.
I'll admit that the above narrative isn't watertight. I think it's the best analysis that can be done verbally. The only models that allow a meaningful discussion of welfare in the context of financial markets are so called noise-trader models, which explicitly model the (irrational) reasons why most people trade. The whole field is vastly complicated by the fact that theory predicts almost no trade in stocks if people were completely rational.
[0] http://www.marketwatch.com/story/why-insider-trading-should-...
Let's say the price of a share with the inside info is 110. It is now 100. The inside trader does cause some volume that wouldn't have happened otherwise, and moves the price to 105 -- to the detriment of someone who would not have traded otherwise. But then every subsequent trade is at a price closer to the true one, a clear benefit.
It is true that greater information asymmetries will decrease liquidity/widen spreads, but is this a sufficient justification for banning inside trading? Also, information asymmetry is a matter of degree, not a binary thing. A skilled fund manager may have assembled public information (the "mosaic" view) that when put together is tantamount to insider info. You could use the exact same argument to ban him from trading.
If an insider knows a stock will yield him 10% profit and has a month of time to buy stocks, even if the daily volume is 500k shares. They can gradually buy shares at 20k/day, and once that news becomes public and the liquidy goes up they can sell off all of their shares in one shot pretty much. And people just just got news of the information would think that their stock has a 10% upside, but since someone already beat them to the 10%, they aren't going to get anything.
This is true of all professional trading.
> borrowing money to short stocks in a company likely to go bankrupt, while telling people to buy
This would be fraud, which is illegal independently of any insider trading rules
And how does the incentive to lie to other traders apply only to insider trading? It seems like that would always apply to all trading.
"Wrong" doesn't automatically mean "criminal."
Should deal with that
It's a dick move, but seems perfectly legal.
If one can backup and use a fuzzy enough lens, one can just ask "how should society calculate the total benefits here" but the problem is this begs the question of whether it's proper for the state to just ask these questions.
My impression is that none of the insider trading proponents are also proponents of the view that it's not theft to take money that falls off the back of an armored car because "it's hard to who it belongs to" and "we might well benefit from this money more than whoever it really belongs to" but their arguments seem the same. Further, the average people finding money on the street probably really do need it more than your average insider trader.
> If one can backup and use a fuzzy enough lens, one can just ask "how should society calculate the total benefits here" but the problem is this begs the question of whether it's proper for the state to just ask these questions.
But in the case of insider trading, there is no such person. Lambdapie identifies that there is a cost (yes!), but that cost only exists at a fuzzier level than "the person stolen from". Trying to examine at a finer level doesn't make sense.
The gp does a good job of describing how insider trading actually takes money from particular people. Are you saying that a certain number of people should have their money taken in order that prices are closer to predicting otherwise unknown results? Something like "by eminent domain, we are taking your investment profits for the great good of accuracy in stock prices".
Moreover, the other people who benefit from price jumps from invisible sources are those who don't know anything but who are willing to gamble that these price jumps represent a real increase in value. The existence of such gambling would seem like it increases the overall volatility of the market and given that such gamblers would tend to magnify random jumps in the market as well, it seems like society broadly would not experience any benefit.
Let's say I believe that the company I work with is horribly mismanaged. I short it. Then, all of a sudden, an announcement comes ("corp X is going to buy our company") that raises the price and makes me lose my pants. I have two choices now:
a) lose my pants, or
b) use the due-diligence period to try to kill the deal from the inside.
Are you willing to hold stock of a company in which (b) is likely to happen? I don't.
Furthermore, even though a 5% discrepancy is already huge, in many cases it is much larger than that: valeant recently dropped 70% in a few weeks, and insiders knew all about the irregularities1; If allowed to short, a new employee, upon discovering those irregularities, has a great incentives to quit, short, and go to the newspaper. While this would deliver justice much more swiftly to the company, it would do so to the benefit of that individual at the expense of everyone else. We disallow vigilante justice in general for good reasons and this is no different.
If you send a 1000 share buy order to the market, knowing that you're going to send 99 more of them throughout the day, you're making money (or at least losing less money) because of information that you have and your counterparties don't. And that kind of trading definitely has a negative effect on liquidity (almost the whole difficulty in market making is preferentially trading against people who aren't doing this). But this splitting of orders is universally viewed as "ok", and is how most large-volume trading is done these days.
The difference between this and insider trading is in who owns the information. Most people view the large-volume trader as doing something okay, because they own the information about their own future trading behavior. Insider trading is illegal not because it's unfair to trade on asymmetric information, but because you're trading on information that was stolen from the company. (This is why Mark Cuban didn't go to prison: a company gave him some insider information, but forgot to ask him not to trade on it; no stealing involved).
From this perspective, it makes sense to prosecute the original tipper, and anyone in the chain who knew (or should have known) that the information was stolen (by analogy to the crime of passing stolen goods), but not the guys at the end who were clueless about the scheme. (Although it might make sense to make them disgorge their trading profits.)
With inside information, it's not available to people outside the tipping network at any price. This, more than the mere chance of getting "picked off" by asymmetric information, drives traders out of the market, making it less liquid. If they were just losing because they didn't have good enough analysts, they could always compete and hire more. For the same reason, regulators and exchanges try to keep manipulators out of the market even if they bring a lot of volume. Eventually people will lose confidence in the market itself and leave.
But surely this is begging the question? If there were no laws restricting trading wouldn't information that we currently call "inside information" become available at some price? I could easily see some exclusive, high priced news service selling these leaked facts. It would then cause the "true price" of the stock to be found much, much quicker.
Also, simply being aware that such a service exists and can release information at certain times would let uninformed traders exit the market during releases. Right now insider traders can arrive randomly at any time.
Anyone can try to schmooze corporate insiders so that they tell you some juicy information. And that seems a lot easier (theoretically and empirically) than becoming Warren Buffett.
Let's take a stylized version of a recent insider-trading case:
- A company ("Conglomacorp") employs someone ("Big Mouth") to dispense inside information to investors. Usually he does this by sitting in his office and answering phone calls. (This is common, and definitely legal.)
- A particular investor ("Shylock") develops a friendship with Big Mouth, and regularly goes to dinner with him. At dinner, Big Mouth tells this investor company information.
- Shylock trades in Conglomacorp stock.
- It's stipulated that if the information that Shylock received had been dispensed during work hours, there wouldn't have been any legal problems. But he is prosecuted on the theory that, since it was dispensed at dinner, outside of work hours, he should have been aware that trading on it was illegitimate.
How does this case fit in with your ideas of insider trading? It's certainly not the case that "[the inside information is] not available to people outside the tipping network at any price". You have to be a big enough investor that the investor relations desk has time for you, but that's open to anyone.
Also, FWIW, and I'm sure this wasn't your intent, but "Shylock" is considered an Anti-Semitic slur by many people.
Once we see that this isn't the case, it becomes necessary to do a cost benefit analysis to determine the true effect of allowing insider trading. But as you say, this should be done on a utilitarian basis, not on some imagined "rights" of the counterparty to insider trading. (EDIT: I don't mean to imply that economic analysis from a utilitarian POV can't clarify what we should think of as people's rights, but rather that as you said, causing someone else to have a negative outcome does not prove that someone's rights are being violated)
Am I missing anything else? Did the author make a specific argument for why insider trading would prove to be efficient (i.e. why the effect on liquidity outweighed the increased information revelation?) I doubt it since the author's language suggest someone familiar with law and philosophy but not so much finance and econ.
You are implying that I don't realize that insider trading reveals extra information. But I have clearly stated in almost every post that insider trading would reveal additional information. There's no point continuing this discussion if I am responding to what you say but you're ignoring what I say. I'd ask you to keep an open mind and not assume that other people just need to be enlightened via terse replies.
>So (and again, a model is really needed to confirm this) public information is cheaper in terms of its impact on liquidity, than insider information. One thing I'm not certain of is whether many insiders competing to trade on the same information would be as good as public information
That sounded to me like you were against insider trading because it wasn't as efficient as public information. I don't get why that implies we shouldn't allow insider trading.
Your other post said that it necessarily harms someone, but I think that argument was successfully argued against in the link I posted above. Do you have a problem with that part of it?
Also, I would still like it being up to the company. If liquidity is important to them, and the experiment shows that allowing it leads to less liquidity, then eventually they'll stop it.
I don't think that market is inefficient enough to necessitate government action.
I do implicitly address these issues in my comment, when I compare public information with insider information. Noise traders are the goose that lays the golden eggs[0]. They irrationally trade randomly in a stock, masking the trades of informed traders. They make a trading loss on average, and these losses provide the profits of informed traders, which gives those traders the incentive for price discovery.
Although the simplest noise trader models can't capture this (as all information takes the same form) [1], public information is much less costly to the noise traders. So for example, noise traders lose a lot more if a company's earnings are leaked to a few individuals, than if these earnings are made public, because in the latter case the market maker can distinguish information from the the noise trader's trades.
So (and again, a model is really needed to confirm this) public information is cheaper in terms of its impact on liquidity, than insider information. One thing I'm not certain of is whether many insiders competing to trade on the same information would be as good as public information.
[0] See the seminal work of Kyle (1985), http://www.jstor.org/stable/1913210 and also the review article http://scholar.harvard.edu/shleifer/files/noise_trader_appro...
[1] Giving the market maker access to a meaningful information set would resolve this issue.
So of course the source of the information matters.
I'm sympathetic to the argument that it's bad to take illegally obtained data and pass it along in a don't ask, don't tell manner to avoid prosecution. But that Dell data? The guy's job at Dell was to share company info with investors. To say the information was obviously dodgy is total nonsense.
Ridiculous. Having access to information others don't is privilege, not thoroughness. You can be just as thorough as you want, so long as others are not prevented from being likewise. Without that, capital markets cease to be open. That way lies oligarchy.
The insider had no right to divulge that information. I don't care whether it's technically theft but it is definitely immoral, and should definitely be illegal.
If I'm busting my ass off in a startup I sure as heck don't want my buddy to sell or give away our trade secrets to the competition.
That's an entirely different question.
If someone else deduces the same information, does my copy stop being nonpublic? Or was I mistaken in thinking it was nonpublic at all, since someone could deduce the same information?
If I'm watching a company's delivery road from across the street, is all that info public even though it's only available to me and five other people in the world?
I think it is also clearly the case that concrete insider knowledge will be considered differently than deductions.
This goes on and on about the meaning of the term:
http://www.investopedia.com/exam-guide/cfa-level-1/ethics-st...
Now, I pass on this information to someone. They short the stock based on this information alone. Have I or the person I talked to broken insider trading rules? I'd say no.
I think it would be loudly argued that the person receiving the information was aware of why it was valuable.
Is it illegal for you to act on that information? I should think so, but it will be hard to prove unless you do a unreasonably large trade.
How did a couple of railroad yard workers catch wind of a multibillion-dollar leveraged buyout? The complaint says they suspected something was up when they saw “people dressed in business attire” taking tours of the rail yards. It suggests their curiosity was further piqued by a day-long rail trip the Fortress folks took in a special train car reserved for visitors.
http://dealbook.nytimes.com/2010/10/01/s-e-c-charges-railroa...
http://www.lexology.com/library/detail.aspx?g=84aea8bb-af1b-...
If it is market-moving and Acme lets you share that information then they're violating Reg FD.
If it is market-moving and the person you talked to knows that you weren't supposed to share it, that's insider trading. When does the court say they should have known that you weren't supposed to share the information? When they know that you received a personal benefit for it (or a few other circumstances e.g. they know you agreed to keep it confidential).
This is particularly important because often these cases are about investor relations people rather than janitors. If an investor relations person tells a trader something, they can trade on it. If a trader bribes an investor relations person to tell them something, they can't trade on it. (The law aligns with common sense here IMO). Now, what if an investor relations person tells an intermediary something, and then they tell a trader that thing, and the trader trades on it? The law here is that the trader has to know that the investor relations person was bribed - because otherwise they have no reason to think they're committing a crime.
Therefore, free and legal insider trading would actually increase fairness in the market.
Of course, the sleazier Edward D. Jones strip mall and small town stockbrokers would probably increase their own profitably in the short term by lying to customers about having insider info. It would work until the gullible customers were tapped out.
Sounds like a good outcome to me, since that's basically the case anyway...
Markets are information aggregators.
I do recommend you watch "American Greed" on CNBC.
It is amusing to me how when all these amateur game theorists create these hypotheticals to prove that insider trading is good, they always assume that there is an endless supply of chumps with an endless supply of money willing to take the opposite end of the trade. Well, let me tell you, people are not that stupid. Especially people with money.
Back in the dark ages, most people with money felt the best place to keep them was locked in a chest in the deepest room in a large castle. There was very little investment, and the dark ages were a time of extreme poverty. It is only through a long series of laws and institutions developed over couple of hundred of years, that we have reached this point of mobility of capital, which allows capital to go where it is most useful, and greatly benefits the economy. But if we remove investor protections things can slide back very easily and very quickly.
Insider trading probably ought to be thought about when designing regulations---but I am not convinced either way that it should be banned.
I am fine if Wall Streeters rip off each other but with the regular guy pretty much forced into the stock market I think there should be very tight regulation and certainly no insider training.
A little off topic but I am so pissed off that US Congress members have passed laws that make themselves and their assistants immune to being prosecuted for insider trading.
You know the system is getting more corrupt when such bad behavior is not even hidden from public view.
Income inequality may be worth correcting for (I sure think it is), but it does not follow from that view that markets should be distorted to try to accomplish that. There are plenty of other instruments we can apply to that problem that will be more effective and will harm the economy less.
The reason it wasn't illegal for them before the recent law was because they weren't insiders. Congressmen do not owe a fiduciary duty to third party companies. And they don't owe congress or the government confidentially for stuff they learn on the job.
In fact the whole insider trading rules were not even passed by congress. It's a mix of SEC regulation and essentially federal common law that created insider trading law.
Also congress wasn't really immune. If a congressman payed Tim Cook for Apple info, that would have been illegal.
Originally, I thought the "Umlaut" is a typo or a mistake, but, according to wiktionary, "coöperate" is an actual word! I still feel like pronouncing the second "ö" like in German though.
Used in this way, a diaeresis tells the reader that it's pronounced as "co op" and not "coop".
http://www.newyorker.com/culture/culture-desk/the-curse-of-t...
Most people would just write "co-op" nowadays -- I've only ever seen this in the New Yorker.
"English speakers and writers once used the diaeresis more often than now in words such as coöperation (from Fr. coopération), zoölogy (from Grk. zoologia), and seeër (now more commonly see-er or simply seer), but this practice has become far less common. The New Yorker magazine is a major publication that uses it."
https://news.ycombinator.com/newsfaq.html
Edit: One side-effect of our recent experiments in resuscitating solid articles is that it increases the number of reposts in the story stream. Given the number of comments we've seen about that, it seems users don't like this, so we've begun working on an alternative approach.
Some other sites get similar beneficial multiple submissions.
But many sites don't get this and repeat submissions just count as dupes.
Look at this: https://news.ycombinator.com/from?site=newyorker.com It's crammed full of dupes.
[1] or NYT or WSJ or etc.
From the FAQ:
> Are reposts ok?
> If a story has had significant attention in the last year or so, we kill reposts as duplicates. If not, a small number of reposts is ok.
It's not very clear what significant means, but all the previous submissions have 0 or 1 points and no comments.
I think that one problem with dupes is that the previous submission have some interesting comments that are "lost", so if I find a very interesting comment I quote part of it in the new submission.
"It’s not that it will be impossible to bring insider-trading cases from now on; it’s that, at a hedge fund, all of the legal liability will now rest with the analysts and traders on the front lines of information gathering—with the initial knowing recipients of a tip. (Incidentally, if you’re a junior portfolio manager, this might be a good time to ask your boss for a raise?"
1. This means anyone, such as a home trader, hires a worker who receives insider financial tips from and passes that information on to me. I can then make the trade, and profit. I am legally protected, as long as the employee didn't tell me about the origins of the tip? The only person liable would be the employee?
"With billions of dollars to be made in betting on the market, whether or not you see cause for alarm in any of this will likely depend on just how scrupulous or unscrupulous you think the average investor is."
Of course the average investor is unscrupulous. For as long as I can remember, the successful investors used insider information to make money on investments. Growing up they openly exchanged tips at church functions. Hell, the only real money my father made in the market was off an insider tip. My father didn't even know it was inside information. He just trusted his new father in-law.
My point is ever successful trader, I tangentially knew, used insider information to make a profit.
My second question to the lawyer. The boys at Google/Bing can see every every IP. They can map every IP to an address, and most likely a name. They probally know exactly who's who in all financial institutions throughout the world.
Could Google/Bing hire an analyst to scrape the data/information are pass that information to a higher up. The "Higher ups" could then make stock trades on this in data. (yes--I know Google only scrapes information in emails for "advertising" data.) 2. Could, if a search engine was combining IP to a name, address, and maybe where an stock trader works. Could The search engine put all that info. together and use that information to buy stocks? They might even call it big data mining for financial gain?
Or, would this senerio be invasion of privacy, and wiretapping?
(I have two questions poorly laid out in this mess of a paragraph. Sorry. I will number the sentences with my final question, as 1, and 2.)