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Comment by qqtt | Hacker News Reader

I'm not sure if this is standard for SEC press releases, but why do they include details such as, "he was a school teacher" and, "he owed gambling debts"?

I've always suspected the SEC investigations regarding things like insider trading are typically the opposite of justice and designed to go after the smallest possible players while giving the illusion of enforcement. And these details in an allegedly serious investigation just seem to make the whole thing reek of small time gossip material.

It's just kind of surreal seeing this type of language in an official SEC press release regarding what I'm sure they would like us to believe they consider a serious crime.

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The full context in the press release is:

> The SEC’s complaint alleges that Wylam, a high school teacher and bookmaker, traded on this information and also tipped Naveen Sood, who owed Wylam a six-figure gambling debt. Sood allegedly traded on this information and tipped his three friends Marcus Bannon, Matthew Rauch, and Naresh Ramaiya, each of whom also illegally traded on the information.

In order to make an insider trading case against people who are several degrees out, they have to show how non-public information flowed to them. Establishing that Wylam is a bookmaker and Sood is a client of his is an important part of this. Maybe the "high school teacher" part isn't particularly relevant, but if you cut it, it would sound like he was a full-time bookmaker, which isn't the case.

I also found the "best friend" part to be strange – I expected language more like "close acquaintance" instead

BFF.

bestie

Wouldn’t that just leave you with more syllables and less precise language?

Would you prefer "he wasnt sufficiently politically connected" and "his family never made friends in the right circles"

>why do they include details such as, "he was a school teacher" and, "he owed gambling debts"?

I would assume to soften the expectations that result in this kind of no-guilt thing you never see given to...other segments of society:

Bannon, Rauch, and Ramaiya consented to the entry of final judgments without admitting or denying the allegations in the complaint

> designed to go after the smallest possible players

SEC doesn't have infinite resources to go after every possible financial crime. They go after the ones that have the highest likelihood of successful prosecution. This is the case with most prosecutions like this.

> SEC doesn't have infinite resources to go after every possible financial crime.

So that makes token gestures acceptable?

That's called "revenue policing" and the only people who like it are the people high status enough to not be subject to it.

Whatever it's called doesn't matter. There's not a viable alternative. If you don't prosecute charges with substantial evidence, the risk of loss increases and eventually the department bleeds money at too large a degree and gets shut down causing no enforcement

> the only people who like it are the people high status enough to not be subject to it

Everyone at the SEC is keenly aware that bagging a high-ranking financier is a ticket to higher office.

Which is quite frankly disgusting even if society does have a somewhat merited hatred of bankers.

Can we come up with an example of an SEC official building upon an investigation of a "high-ranking financier" in order to obtain high office?

Not SEC, but US attorney for the Southern District Preet Bharara apparently made his fame by going after Wall Street bigwigs. I don't know much about him besides his Wikipedia page (which could be edited by a PR firm), but it seems that was his career trajectory.

Another not-SEC example would be Eliot Spitzer who parlayed his policing of Wall Street corruption as the Attorney General of New York into a governorship.

SEC pursued junk bond pioneer Michael Milken in the 1980s, Ivan Boesky before that… unsure of specifics of SEC personnel getting to “high office” because of that but seems obvious that high profile successful prosecutions would be career-making

(Granted those examples are from the 80s but i would think there are more recent examples…)

Milken was prosecuted by Rudy Giuliani which didn’t hurt Giuliani’s career, but Rudy was a US district attorney or something, not SEC

Agree with your sentiment generally though, seems like a boatload of people could have been put away after the financial crisis but they instead profited from bailouts

Milken's prosecution didnt really hurt his career much either. Hes still a billionaire (and if I remember right, his brother did very well too).

PS - read Den of Thieves again - there is an imo strong parallel between what was going on with junk bonds in the 80s and what is happening now with VC money. When Milken was indicted, he couldn't keep all the balls in the air anymore and the whole thing fell apart. I'm very interested to see what parallel will play out this time and when.

Didn’t hurt his career much? He was barred from the securities industry forever. Sure he had a lot of money left, but how can you know where his career would go if he weren’t prosecuted? That’s like saying that if Bill Gates were forced to cash out of Microsoft in the 80s it wouldn’t have affected his career much because, after all, he would still be a billionaire

>bagging a high-ranking financier is a ticket to higher office.

And not bagging is a ticket to a very nice corner office I guess :)

The fact we haven't come up with a single SEC-to-higher-office example seems to indicate that your scenario is more common...

> Everyone at the SEC is keenly aware that bagging a high-ranking financier is a ticket to higher office.

Just speculating here, but I imagine everyone at the SEC is also aware that going after someone with 9-figures-and-higher wealth may not be cut and dry. At those levels, the person you are going after can wreck your [and all your colleagues] lives in new and interesting ways that aren't apparent.

That’s why they go after 7 and 8 figure guys they are way easier to pick off but still juicy

> At those levels, the person you are going after can wreck your [and all your colleagues] lives in new and interesting ways that aren't apparent.

Which is exactly why having that much wealth should be impossible or illegal. No single person should have that much power.

With that being said, who am I kidding? It's obvious that the old forms of power haven't gone away and never will.

Do you have an alternative solution, to getting around the problem of the fact that they don't have infinite resources?

Do you think that they should just go after crimes, at random, even if that means that much less crimes are successfully caught, because of the inefficient use of resources?

Yes

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