Everything everywhere is securities fraud
bloomberg.com
bloomberg.com
But the buyers have sued Toshiba using the US court system!
"Toshiba Corp. is a Japanese company whose stock is listed in Japan. It has unsponsored Level 1 ADRs in the U.S., through no fault of its own. [Toshiba] did a fraud. U.S. investors lost money on their ADRs and sued, and Toshiba objected that it had nothing to do with those ADRs, or with U.S. securities markets in general. Last year a U.S. federal appeals court let the lawsuit go forward".
I also love this quote from Matt "If you are a member of the global insider-trading Illuminati, please tell me about it over unencrypted email."
But even the Alien Tort Claims Act only applies to torts, and only to those which are "...committed in violation of the law of nations or a treaty of the United States."
The ideology itself formed mostly from historical consequences and collaboration with neighbors.
The consequences being their relationship with other countries. Specifically related to negative consequences that have an impact.
The US ideology has no limit to its scope, and the consequences are non-existent. When other countries disagree with US ideology, their desire to maintain a relationship with the US is greater. This allows the US to so far operate with impunity, with notable exceptions being Russia and China, which do ignore administrative requests from the US for things within their territory.
This should give a lot of color and context to why the US has a different meaning of jurisdiction than what people expect.
A future US could be subject to unilateral drone strikes and internationally coordinated sanctions, forcing more mutual cooperation and limitations in its enforcement scope.
Nobody is worried about China drone strikes, but they'll hand over IP or whatever is needed.
I can than profit off of being an activist investor with much more leverage utilizing much less capital.
If this is what you want, though, you could just buy a share of each public company. (An index fund wouldn't work, I don't think, you actually need to own the stock.)
(not a lawyer)
If that's true then in such countries you may only win an award of a few Euros but the cost to the losing party could be millions (your and their legal fees). If the company cave and accept liability, or whatever, then they're probably going to have to pay out to all shareholders (or customers); which might be even more cost.
So, even a small ownership can be leveraged.
If my understanding is correct then the unique USA system flips things putting the corporations in the power seat as legal costs for a case are usually much less of a proportion of their cash reserves/profits/available credit. Not awarding costs removes the multiplier making litigation too costly for all but the very richest in society.
It would be a bit like a pandemic bond:
https://www.iii.org/insuranceindustryblog/pandemic-catastrop...
You might even find ready counterparties amongst firms that do business with the company in question, or law firms who take them on on a retainer basis.
I unironically quite like this idea. Now, who do i know at an investment bank?
This seems to be a cautionary tale for anyone thinking of buying such things, since theoretically you are just screwed if something like foreign accounting fraud tanks the value. But since this is the US and you can file a lawsuit against anything under the sun, these investors tried, and apparently succeeded in bringing a suit against a Japanese company for Japanese crimes in US court.
This Netflix link seems to work though: https://dvd.netflix.com/Movie/The-China-Hustle/80221646
Or on Rotten Tomatoes: https://www.rottentomatoes.com/m/the_china_hustle
GDPR
The case in point is like a US web company only providing services to US customers, but some Europeans who VPN'd into the US web site and pretended to be Americans sued it under the GDPR anyway. In this case the proxy company holding the Toyota shares takes the role of the VPN.
That’s what I said. Visit their website.
Similarly, if I only sell food outside the US I am not beholden to US food labeling laws even when someone imports my product into the US.
In my own personal experience, people are most often mistaken about what is insider trading due to a combination of a vague sense of unfairness and a lack of background knowledge about the reasons for insider trading laws and the exact harm those laws are designed to prevent.
Matt Levine has written extensively about this and it's all quite interesting!
While I can't find it right now I recall studies that showed that the typical return on a Senator's investments was at least 11% greater than would be expected which is a data point to take into consideration.
I do agree it is all very interesting and will read more of his works when I have time.
Stock buybacks used to be illegal, until they weren't. Very relevant in the current market. Not insider trading as such, but a form of manipulation that one might consider related.
https://mavenroundtable.io/theintellectualist/news/stock-buy...
I'm sure my analysis is naive and missing something, but on first glance, this doesn't strike as a problem anywhere near as bad as insider trading.
Dividends tend to be "sticky" since changing them all the time gives investors little certainty over what they should expect to receive (and if there's anything investors like is certainty)
Buybacks signal management (a) has no better source for capital and (b) probably thinks the stock is currently undervalued (i.e. it's a good time to buy back cheap shares).
Companies very often do not have projects to invest with a return higher than their cost of capital, and any reasonable CFO who finds themselves on that position should pay back its equity holders who risked their money by investing in this company with a given expectation on returns
The really honest argument is that buybacks are taxed in a special manner, and this difference between taxes on income and taxes on capital gains is what's really driving income inequality in the U.S.
Prior to 2009 insider trading cases were generally clear cut situations like an accountant telling a trader about an upcoming merger in exchange for a bribe. Then Preet Bharara started pursing insider trading cases very aggressively, punishing people for being downstream of insider information, even when they didn't know the original source, and no one was bribed.
Starting in 2014 judges started pushing back on this broad interpretation of insider trading rules. Recently a 2013 guilty plea for insider trading was vacated because the behavior he admitted to is no longer considered against the law. Again, this isn't because of lobbying, but because judges have decided that the correct view of insider trading is the one that existed prior to 2009, not the broader one that Preet Bahrara pushed for. Even the laxer standard for insider trading that judges have returned to make the US stricter than most countries in enforcing insider trading.
Politicians aren't considered insiders in the traditional view of insider trading. Trading on Congressional information, which you alluded to, was legal until 2012, when it was banned not coincidentally while insider trading law was expanding in other ways.
https://www.reuters.com/article/us-sac-insidertrading-lee/u-...
> Crypto Traders Also Enjoy Investing In Tesla, Claims Redundant Study.
Which manages to state a fact and deliver a joke in just 10 words, because of the unspoken implications.
His points are valuable, and the repetition helps me remember what he is saying.
I love the different examples and different facets of the same issue (although it is only a few months reading the eletter so far).
(sharing this here because Bloomberg's website makes it really hard to find)
For practical purposes, "store" includes "put in a computer".
Consider that:
--Saying you committed a crime is definitely incriminating, so storing that is probably not in your best interest.
--You are not qualified to know that you are _not_ breaking the law.
--In fact, the only way to determine this affirmatively is by trial.
--If you think no one important cares, you might still piss off someone important later (Corollary: pissing off someone important is a good way to find out whether you have broken the law).
I would encourage readers to see Moxie Marlinspike's essay on this subject. The thesis is that the ability to capriciously and selective prosecute anyone is stiffing to dissent, and prevents political change. Students of recent US history understand that this is far from purely theoretical.
"if everyone’s every action were being monitored, and everyone technically violates some obscure law at some time, then punishment becomes purely selective. Those in power will essentially have what they need to punish anyone they’d like, whenever they choose, as if there were no rules at all.
Even ignoring this obvious potential for new abuse, it’s also substantially closer to that dystopian reality of a world where law enforcement is 100% effective, eliminating the possibility to [directly] experience alternative ideas that might better suit us."
https://moxie.org/blog/we-should-all-have-something-to-hide/
Edit: To be clear, I think you make good point that privacy laws won't save you from a subpoena. However, they are probably useful for other reasons; this was why warrants and other notions of due process were created to begin with, including the requirement that a warrant or subpoena be limited in scope to that material which is relevant to a particular charge or investigation. I think one big problem today is that people are ordered to surrender "everything on your phone and cloud", etc. This is at least equivalent to search warrant for "your filing cabinet", if not "everything you have ever written or said."
Amazingly enough, there are more than zero traders who are sufficiently arrogant bozos that they will chat, on these recorded channels, about coordinating to break the law, stating on the recorded channel that they know they are breaking the law.
If by “developed” you mean the U.K., Australia, France, Germany or Japan, then yes. Parsimonious retention is a generally prudent measure.
^this^
- assume that anything you write about an individual in an electronic message will at some point be read by that individual and phrase it accordindly
It has served me well - I can't count the number of times I've seen a message forwarded unexpectedly (or been able to scroll down a long email chain to see some juicy stuff).
> Anyway it totally worked? “Georgia agriculture officials suspended the index late that year after some poultry companies declined to provide documents attesting to the accuracy of the data they submitted.” One possible reading is that companies were willing to lie about chicken prices, but they weren’t willing to lie about whether they were lying about chicken prices. 4 I suppose you could try that with real Libor too.
He missed the point. These guys were willing cause the company to lie. But, as the certifications presumably came from the individuals making them, were unwilling to be personally liable for the statements' accuracy. It's the same principle that underpins executive liability under SarBox.
[Edit: Huge fan nonetheless. Incredible volume of high level content comes from this guy.]
That depends on how the certification worked. If it was an internal compliance officer or someone that had to sign off, then you're right. But it also sounds like it might just have been that Company X has to hand over some documents, in which case no specific individual is accountable for certifying accuracy.
Similar to how when you ask a child "Are you sure it wasn't you who broke the vase?" They made the additional denial, surely once that step has been taken, the hard work is done.. but you can practically see the additional psychological pressure!
Immediately telling them would still make the stock price plummet and you'll still lose probably the same amount of money. I think what most people want is: Tell me and only me first when there is something bad, so I can sell before the stock goes south.
If you start prosecuting everything and trampling over the laws of other nations, aren't they then going to start trampling back. Internet companies are largely US companies, how are they going to be able to function if they have to follow mutually exclusive laws. Eg if promotion of homosexuality is illegal in X, and free speech is protected in Y and both nations enforce their laws globally, what do you do?
If they don't care, best of luck to you... you're on your own.
This isn't a 'tax' that will just be paid by foreign countries, it will be passed on to US companies, it just seems incredibly short sighted.
That anyone would base a trading or investment decision on the size of the bid or offer at any moment of time is frankly, crazy. Algos are constantly changing(edit) price and never dealing. Brokers allow orders to be only partially display, balances kept in 'reserve'.
There are many, many ways people attempt to "manipulate" by not showing their hand just as their are ways that show a hand (or many hands).
It seems fairly likely that Toshiba committed securities fraud and that if they did, that Americans making transactions in the US were detrimentlly affected.
It's certainly an interesting legal question. It would be nice for a perpetrator if they could use an international jurisdictional legal loophole to limit liability for their fraud.
But in terms of actual justice, it would be bad.
In general, you shouldn't have to directly control the mechanism by which your fraud causes damage to be held liable for the fraud.