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Aren't SEC whistleblower awards setup to combat the scenario you're proposing? The first individual to defect would presumably earn vastly more money than continuing with the scheme.

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Thing is, it could happen semi-inadvertently even, such that there’s nothing to blow the whistle on. Basically, the incentives are aligned to support the above scenario. If the thinking going into the public funds is geared toward how “big money” works, and the small, private fund is designed to exploit features of “big money” moving around the market, and you get some cross-pollination of those hypothesis about what “big money” should do, the scenario described above emerges naturally. No grand conspiracy in a smoke-filled room is necessary.

"The SEC has now awarded approximately $376 million to 61 individuals since issuing its first award in 2012."

There's no way the incentives from something like this SEC program could outweigh the economics of being high up within Rentec. [No dog in this fight about theorizing fraud vs. legit, just saying the SEC gap is multiple orders of magnitude in incentives here.]

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