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Comment by liquidify | Hacker News Reader

This isn't a feeling of injustice. This is a direct action by a CEO and his company that by all standards meets the definition of insider trading.

>>> The illegal practice of trading on the stock exchange to one's own advantage through having access to confidential information.

These guys had access to confidential information, and they prevented trading, and allowed specific trading that was to their own advantage.

This is a near textbook example of insider trading except that it wasn't the CEO who directly made the advantageous trades. But that makes no difference. This activity fits both the definition and the spirit of insider trading.

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This is vastly different from insider trading - they're not even comparable issues. You could at least reasonably argue a case for market manipulation (though I'd still disagree).

You can't say this is insider trading unless you generously expand the definition of insider trading to include every kind of wrongdoing in the market. Robinhood executives didn't trade GME and didn't have any nonpublic information.

These definitions matter.

Their actions meet the definition nearly exactly. The only difference is that Robinhood didn't directly execute the trades. However, the party making the trade doesn't matter. If insider information was used to benefit someone else, it is still illegal. And this case, it is clear that Robinhood acted in close coordination with 3rd parties to benefit themselves and their friends. The actions they took and the order they took them could not have occurred without Robinhood sharing insider info.

> Their actions meet the definition nearly exactly. The only difference is that Robinhood didn't directly execute the trades.

So...not "nearly exactly" at all. Moreover Robinhood isn't even an insider with respect to GME.

Robinhood gave privileged information regarding the details of securities to various capital groups, who directly benefitted. The 'exactness' of meeting the definition is a moot point. They certainly meet the spirit of the definition, and if we want to argue semantics, then yes they meet the exact definition.

> Robinhood gave privileged information regarding the details of securities to various capital groups, who directly benefitted.

No it didn't, because it didn't have privileged information about the securities. Just because it's a broker doesn't mean it has privileged information about the securities it brokers. Brokers do not typically have privileged information about the securities they broker. To have privileged information, Robinhood would need to be an insider to those securities. Which it isn't.

I don't know what else to tell you - your understanding of the conditions required to meet the SEC's definition of insider trading is simply incorrect. You need to revisit the specific definitions of "insider" and its impact on confidentiality and fiduciary duty.

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