It's really easy to look for trades before significant stock jumps. In this case, he made profitable trades before 11 straight earnings announcements. I'm sure their analysis flagged his trades, and then when they found out that his wife works at Amazon, they declared, "I choose you, Pikachu!"

SEC targets regular people to keep us in line. They let big institutional traders and connected people go.

Low hanging fruit. These kind of trading activities are almost super easy to catch, its like a small fish cheating on their taxes, software will detect it eventually.

That was the highest irregularity they could detect committed by people with no significant connections.

I don’t know about IRS but SEC enforcement actions are largely driven by complaints from regular people. Perhaps the stock broker got suspicious and acted per their ethical duties, or perhaps one of them wasn’t as tight lipped as they would have needed to be.

I have no doubt the SEC has a bunch of rules they use to flag suspicious transactions. The data analysis spits out a few names and they follow up in person to see who lawyers up and who cracks under pressure.

It's also why Matt Levine's "rules of insider trading" includes "Don’t do it by buying short-dated out-of-the-money call options on merger targets".

Certain transactions are suspicious as hell, especially when they can look at your trading history and determine you've never really traded much and just opened the account 2 days prior and made a $100,000 bet on the trade. Or for the really clever people, they find out although you made a suspicious trade you don't work for Amazon, but LinkedIn says you're the wife of someone who works in finance there. Oops!

Though I wonder if that rule needs to be updated with r/WSB doing these trades all the time.

https://www.bloomberg.com/opinion/articles/2018-08-12/the-10...