SEC Charges Three with Insider Trading Around Equifax Data Breach Announcement
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How can people be so idiotic?
Not entirely like the main character at the end of that film when he is walking into the office …
Maybe they never saw the ending?
Most importantly, while the criminal has to be perfect all the time, his investigators just have to be right just once.
He made one early mistake. It having said that it was probably inevitable he’d make another one very few people have the temperament for proper opsec and what’s the point of being young, rich and powerful if you can’t enjoy the benefits?
The non-idiotic don't get caught.
Because law enforcement isn't competent enough to catch the intelligent criminals.
a.k.a. their "cut" ;)
As per the SEC indictment, they earned $35k and $73k in ill gotten profits respectively, and were fined $99.7K and $79.9k. That's clearly more than "a tiny fraction"
Seriously, that's a heads I've made 30k, tails I lose some of my savings account. For people in this position that is all the penalty they received is. Worst case they extend their mortgage, which is already likely many times this fine and so the extension is of minimal impact.
But also the people who commit fraud that takes out hundreds of millions of dollars (corporate collapses, etc) do make large amounts of money, and can plead poverty as a defense against full compensation.
e.g. When Enron collapsed, few of the people responsible were jailed, and in fact were giving themselves bonuses mere days before it collapsed. So it lost people $45 billion directly attributable to fraud, and emptied its regular employee's 401ks and pension funds. The victims whose 401ks and pensions were emptied won all of $85 million of the $2 billion that was stolen, and investors got 11 billion. So they stole billions, repaid a quarter of that, and few actually went to jail. Of the fraction that were sent to jail I can't find evidence that they had to return any of the 700+ million in bonuses they received in the year leading up to the collapse, let alone the prior fraud based bonuses.
As another commenters have mentioned, the SEC doesn't have authority to bring criminal changes. That's on the DoJ. Therefore the rest of your rant about how people aren't being punished doesn't really apply.
Also, according to US federal sentencing guidelines, insider trading actually gets you harsher punishment compared to theft[2], 2 more points to be exact. For the duo mentioned in TFA, it's a difference between 10–16 months (for theft) and 15–21 months (for insider trading).
>e.g. When Enron collapsed, few of the people responsible were jailed, and in fact were giving themselves bonuses mere days before it collapsed. So it lost people $45 billion directly attributable to fraud, and emptied its regular employee's 401ks and pension funds. The victims whose 401ks and pensions were emptied won all of $85 million of the $2 billion that was stolen, and investors got 11 billion. So they stole billions, repaid a quarter of that, and few actually went to jail. Of the fraction that were sent to jail I can't find evidence that they had to return any of the 700+ million in bonuses they received in the year leading up to the collapse, let alone the prior fraud based bonuses.
Can you reference specific cases here? It's easy to point at a giant organization where Something Bad happened, and demand that everyone involved be punished, but that's not how the justice system works. You can't enact some sort of collective punishment for everyone involved with enron, you have to prosecute each person individually for the specific offenses that person committed. I suspect the reason for the lack of fines is that they didn't actually do anything illegal, or that they were difficult to prosecute, not because it's legal to defraud people.
[1] https://www.ussc.gov/guidelines/2021-guidelines-manual/annot...
[2] https://www.ussc.gov/guidelines/2021-guidelines-manual/annot...
> Also, according to US federal sentencing guidelines, insider trading actually gets you harsher punishment compared to theft[2], 2 more points to be exact. For the duo mentioned in TFA, it's a difference between 10–16 months (for theft) and 15–21 months (for insider trading).
Is demonstrably false because as TFA says, the penalty for insider trading is a fine, no jail time, and no need to admit guilt.
> I suspect the reason for the lack of fines is that they didn't actually do anything illegal, or that they were difficult to prosecute, not because it's legal to defraud people.
Yet we know from multiple trials, and multiple lawsuits, that what they were doing is in fact illegal, because if what they were doing _was_ legal then instead of saying "most had no jail time" I would be saying "none had any jail time", instead of "only paying back a quarter" they would not have had to pay back any.
In California, you don't need to do anything because it won't get prosecuted. In places with saner approaches to property crime, the store may decide not to press charges if you pay a penalty to them or agree not to step foot in their stores again.
> tails I lose some of my savings account
You're not working in the financial services industry again with an insider trading conviction.
This is demonstrably false.
https://www.houstonchronicle.com/business/energy/article/Enr...
> [F]ormer Enron CEO launched Veld Applied Analytics, billed as a sophisticated online platform to invest in oil and gas assets.
So skilling is back on energy resources, e.g. exactly where he was at Enron
> [CFO Andrew Fastow] has since made a career on the public speaking circuit, with one agency listing his availability to lecture on “corporate culture” at universities and corporations around the world for a $10,000 to $20,000 fee.
Not exactly finance, but I also don't know how I ever get to be paid 10-20k/hour
I can't find anything about the others, but the two big names seem to be doing well for themselves
I'd hardly compare being CEO of a crappy startup with 2 news articles about it to one of the largest multinational corporations in the world. You can probably find some shit fund to work for with an insider trading conviction but you won't work for the big boys again.
> but I also don't know how I ever get to be paid 10-20k/hour
There are former felons who now lead nonprofits (I'm sure with 6 figure salaries) [1]. I quote: "In its third year, Just Leadership has a staff of 20 people and a $7.5 million budget for 2018–2019"
If people still decide to pay the guy after he's committed fraud, that's on them.
I'll also note Fastow went to prison for 6 years so it's not like he just paid a fine and got off. And the only reason it was 6 years instead of double digits was he informed on people.
[1] https://www.forbes.com/sites/laurensonnenberg/2017/08/26/a-f...
> The Commission is authorized by Congress to provide monetary awards to eligible individuals who come forward with high-quality original information that leads to a Commission enforcement action in which over $1,000,000 in sanctions is ordered. The range for awards is between 10% and 30% of the money collected.
A lot of people in Wall Street, especially the ones with access to the kind of information to become a good whistleblower, make $500k+/year.
That means those people are actually very unlikely to want to tell on others, unless maybe they are already on their way out.
Again, I don't know anything, though. I just appreciate the game theory.
Now what is probably true is that the sophisticated professionals probably end up with lesser charges, and therefore lower sentences than outright security fraud. That's not for lack of trying, but simply because it's generally pretty hard to prove guilt beyond a reasonable doubt against someone who's done both a reasonable job at covering his tracks and has access to high-powered defense attorneys.
So what really happens is the Wall Street trader might do insider trading on say $100 million. But the evidence trail is pretty nebulous, the case would drag on for years, and a US Attorney doesn't want to waste their career making case on a highly uncertain case. So the hedge fund manager settles for a civil "failure to supervise" fine. (Even Michael Milken wasn't convicted of insider trading, but the lessor crime of 'parking'.)
In contrast the dipshit amateur does something stupid like leave a trail of text messages with his golf buddy, and then buys a weeks worth of volume in thinly traded out of money call options. The case is open and shut and they get nailed on the full charges.
Synthetic identity fraud is probably a better way to go about being a criminal if you insist on participating via the stock market.
You don’t exactly need a supercomputer to correlate OTM options events for a single security. It’s way more traceable than most probably realize.
There's money in it for you. A few months ago they awarded $17M to a whistleblower. https://www.sec.gov/news/press-release/2022-125
Otherwise, making vague references to "big whales" doesn't really go anywhere.
https://nypost.com/2022/07/20/the-pelosis-trading-individual...
It's not illegal so it's fine is something of a mantra around here.
But Trump is as crooked as he was weak and I honestly believe that too.
I've spent most of my career working in finance. Neither my spouse, my children, my siblings, my parents, my grandparents, my friends, my barber, nor my bartender can act on inside information I was privy to that I may have uttered in their presence. The relation doesn't matter, the non public nature of the knowledge is what matters.
That Pelosi not only has insider knowledge but the power the manipulate the market via legislation makes what she and her husband do that much more egregious. Same for any other congressional scum. They should be held to a higher standard than the plebes, not a lesser.
Insider trading is _law_ and Pelosi is not in breach of the _law_. Apparently the test is that the market moving info to which you are privy has been /stolen/ from the company if you tell your bartender and they trade. Pelosi changes the legal and regulatory environment in the future in ways the company doesn't even know about! So nothing is stolen from the company and her husband /can/ and /does/ take massive positions in short dated out of the money options based on whether a law will pass or not to the financial advantage of the company and so has made a huge fortune for the Pelosis and can then laugh in your face because it is perfectly legal to do so. Pretty sure Pelosi is doing that laughing too but that part is merely like, my opinion man.
Whether it /should/ be legal, whether it /should/ be classified insider trading, whether Pelosi or anyone behaving like that making tens of millions from trading on ifnfo gained in confidence performing "public service" belongs in jail is an entirely different discussion. Around here when someone points out "may be legal but definitely not ok" there are usually a string of responses to the contrary that if it's legal you can't blame a person so that discussion probably isn't worth having, nobody will change their views on it.
Trump is awful and horrendous and it should be crystal clear from the above how that affects my thinking on the vile-ness of Pelosi and her ilk. How about you? Does the existence of Trump make rampant corruption elsewhere ok because it is "not Trump" in your opinion? It does seem to be the zeitgeist in many quarters.
Nothing happens to the big whales, that is the point. Look up Steve Cohen
> Additionally, the final judgment against L. Palmer would order him to disgorge $9,000 plus prejudgment interest of $2,026, and pay a civil penalty of $88,698. The final judgment against J. Palmer would order him to disgorge $28,000 plus prejudgment interest of $6,303, and pay a civil penalty of $73,399. The litigation as to Dishinger remains pending.
In no sense was it "worth it for them."
Yeah I'd like to see proof that's actually all there is, rather than all they were able to charge them with. It's not as if those involved in financial related crimes are always honest about finances, and it could be they only gave up the portions where they figured out the feds were going to find.
doesn't this require proving a negative? If they got charged, presumably the feds combed through their bank records and found any unexplained deposits. You could argue that they had the real loot in some numbered offshore account and/or crypto that's totally unlinked to them, but I'm not sure how you'd prove that those accounts don't exist.