back to article Bloke faces years in the clink for using hacker-leaked press releases in $30m trading scam

A US stock trader has admitted he profited from insider trading – by buying and selling shares using tip-offs from Ukrainian newswire hackers. Leonid Momotok, 48, of Suwanee, Georgia, pleaded guilty in a Brooklyn court on Monday to charges of conspiracy to commit wire fraud. He could get up to 20 years behind bars in addition …

  1. Anonymous Coward
    Anonymous Coward

    Can someone please explain.

    Why insider trading is illegal?

    Surely as long as you arent manipulating the market in some way you've done nothing wrong...

    For example if the fire alarm goes off at the office it alerts me to a situation and I can react.

    Its only bad if I set the alarm off on purpose.

    However, my understanding of insider trading is that if an alarm goes off you're simply not allowed to do anything. Even if not acting causes you harm in some way.

    For example if I work for a company and happen to be holding some shares in it and decide to dump them because internally they've just announced redundancies or something else that might negatively impact their value.

    Over simplified example but I think you'll catch my drift...maybe.

    1. Version 1.0 Silver badge

      Re: Can someone please explain.

      OK, where's my clue by four? Ah, there it is - I'll be right over ...

    2. Tromos

      Re: Can someone please explain.

      A closer fire alarm analogy to insider trading would be discovering a fire and running off without giving the alarm in case others trying to get away impede your escape. Still think there's nothing wrong with it?

    3. Keven E

      Re: Can someone please explain.

      "Today's guilty plea demonstrates our steadfast commitment and preparedness to combating the ever-evolving threat of cybercrime and to protecting the integrity of our financial markets."

      Hilarious. That other guilty party's plea shows "our steadfast commitment"? What a bunch of crap... it does nothing of the sort and it actually shows thier lack of "preparedness"... and it's quite clear it's way to friggin late to protect the integrity of financial markets. <snicker>

      There's no way they can anticipate insider trading (really). Only the trail after the fact. Clearly the world is too big to catch all of it.

      It does show the guilty party's steadfast commitment to bargain out the lowest sentence so he can eventually move to a country that doesn't extradite white collar criminals and start spending all that off-shore loot like any good corporate CEO would do...

    4. Destroy All Monsters Silver badge
      Big Brother

      Enhanced collaborative debt obligations? I will buy anything with "enhanced" in it.

      Insider trading == An accusation leveled as some small fish when the hoi polloi must be served another example of a witch and her judicious burning to show that all is well in the completely rigged "casino capitalism" and the milkable idiots can indeed hand over their money secure in the knowledge that this market is fair and controlled.

    5. Fruit and Nutcase Silver badge

      Re: Can someone please explain.


      For example if I work for a company and happen to be holding some shares in it and decide to dump them because internally they've just announced redundancies or something else that might negatively impact their value.

      That is "material non-public information" (internally announced, not in the public domain. An embargoed press release is not in the public domain), and you are going to act on it. Also, as an employee, there would be restricted periods during which you cannot transact as related to company announcements/reporting.

      Illegal insider trading refers generally to buying or selling a security, in breach of a fiduciary duty or other relationship of trust and confidence, while in possession of material, nonpublic information about the security. Insider trading violations may also include "tipping" such information, securities trading by the person "tipped," and securities trading by those who misappropriate such information.

    6. Fatman

      Re: Can someone please explain.

      <quote>Why insider trading is illegal?

      Surely as long as you arent manipulating the market in some way you've done nothing wrong..</quote>

      I will second the suggestion about bring a clue bat.

      Since you fail to comprehend what is wrong, then try to comprehend this:

      Publicly traded companies (at least in the USofA) are supposed to communicate matters that affect current and potential stockholders in an equal manner. IO(simple)W - do not play favorites.

      When you act using knowledge from privileged sources, not known to the general public about an event which may have a material effect on a company; you are committing insider trading.

      The wrong is the appearance of fraud.

      Example ABC company is about to announce disastrous quarterly earnings, and you find out right before the public announcement, and get rid of your holdings. The announcement is made, and the per share price drops 20%. YOU knew that there was bad news looming, and got out, but whoever bought those shares, didn't, and you perpetuated a fraud on them. You """pat yourself on the back""" for "getting out in time". THAT is the wrong here

      Another example, but in reverse: ABC corp has decided to buy out XYZ corp for $25/share. XYZ corp is currently trading at $15/share. Knowing that a buyout is imminent, you buy up all available shares based upon this privileged knowledge. The deal gets announced, and you make a killing on the upside. THAT is the wrong here

      Now, where did I leave the old Louisville Sluggertm.

  2. Anonymous Coward
    Anonymous Coward

    Oh, just let him off judge.

    I mean, after all he was only using his initiative.

    Yours, Sir Phil Green.

  3. Destroy All Monsters Silver badge
    Big Brother


    High official and people close to high officials of the Bush "Johnny Walker" II administration (Iraq war, Blackwater, Halliburton and all that) and the Barak "Da Peace Bomba" Obama administration (Innumerable wars, "saving the economy", QE and all that) who made out like bandits and are now sleeping on beds made of greenbacks next to luxurious swimming pools got off fucking scot free.

    It's a great world, just don't get caught. Faggots!!

    1. F'tangF'tang


      Give a man a gun and he can rob a bank.

      Give a man a bank and he can rob 10 million people.

      (... Conservative figures given... )

    2. John Brown (no body) Silver badge

      Re: Meanwhile

      "It's a great world, just don't get caught."

      "It was bad judgment and I am very sorry"

      Yep, sorry he got caught. FFS, he's a trader, it's his job. He KNEW it was wrong the first time he did it. You can't get into that business without knowing that. But he still carried on. Once might be bad judgement. Repeating it is planned and with intent.

  4. Anonymous Coward
    Anonymous Coward

    'It constitutes the single largest insider trading scam to date.'

    It constitutes the single largest insider trading scam stupid enough to ignore the need for political cover.

    Most of Wall Street is about gaming the rules and keeping on the right side of political sentiment. These guys were too small to be connected but big enough to be a juicy scalp.

    1. Gnosis_Carmot

      If you ain't cheating, you ain't trading right.

  5. flangeorificial


    Only slightly more corrupt than standard trading.

  6. Anonymous Coward
    Anonymous Coward

    I was once interviewed by LSE re insider dealing!

    A journalist phoned me and asked if I knew anything about an Acorn/Apple tie up. I was an Acorn dealer at the time. He'd been asked by Acorn to attend a press conference in a few days time and a friend of his was asked by Apple to attend a press conference at the same place at the same time (It was to announce the formation of ARM). I knew nothing. The journalist on a public forum mentioned that something was going to be announced. I then bought some Acorn shares. The shares rose after the announcement and then two people from the insider trading department of the LSE arrived on my doorstep. They asked me if I knew certain people at Acorn who I'd never heard of. I told them exactly what had happened and they confirmed I had done nothing wrong. They pointed out that an announcement may have been negative news so just knowing an announcement would happen isn't insider dealing.

    By the time I sold the shares I just about broke even. Now if only I could have held onto them the Acorn shares would have been converted into ARM shares and....

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