Got too greedy yet.....
It is still OK to tank a companies shares to make money.
Well done to the Gamestop investors.
The husband of an Amazon financial executive was sentenced on Thursday to 26 months behind bars for insider trading of the web giant's stock. Viky Bohra, 37, of Bothell, Washington, reaped a profit of $1,428,264 between January 2016 and October 2018 by buying and selling Amazon stock using eleven trading accounts managed by …
I was refering to the fact that insider trading is illegal, but it is not illegal to short a company to bankruptcy.
Insider trading gets caught simply due to greed.
Oh and I am still a little puzzled as to why using information about a company is illegal.
can someone explain it please?
"it is not illegal to short a company to bankruptcy."
You don't short a company to bankruptcy. Shorting a company just means you bet their stock goes down. If it does, they aren't going bankrupt--their investors own the stock, not them. If it goes down, they likely have other problems which could cause them to go bankrupt, but it's not your shorting. Also, the action of shorting doesn't decrease the price. You just hope it does. You are much more likely to go bankrupt while shorting than your target is because being wrong is dangerous.
"Oh and I am still a little puzzled as to why using information about a company is illegal."
Not enough. Using information about a company which others don't have is illegal. Because by doing that, you're benefiting from a situation which others are not in. Imagine that you own some stock in a company, you know that company's failing, but they haven't told other people yet. If you sell before they announce it, you've made money by selling something worthless to someone who didn't know it. That's why it was made illegal. This is subject to disagreement, but that's the reasoning.
I just did my annual insider trading course at work. One point they mentioned is having family members act on your behalf is considered insider trading by you. Also, the information has to available to public for a day before an insider can trade on it. Sounds like a good way to have a very lengthy vacation at Club Fed; all expense paid.
But it's a lot better when the money is legit.
The guy's an idiot. In barely two years he reaps almost $1.5 million and he thinks nobody is going to notice ?
And now he's ruined his wife's career.
I wonder if he'll still have a wife in 2 years and 9 months. If so, it'll be a cold reunion.
"The article said she avoided prosecution because of her husband's plea bargain, so she may have been aiding and abetting his actions."
Clearly she was the source of the information. So either she told him, or she was grossly negligent in her computer security.
Just because you do everything a single person can do, does not mean you get the intended outcome.
Information has a almost unstopable tendency to leak. The best we can do is hold it back temporarily Somewhat clumsily.
Charges against the husband are appropiate, but To assume that the wife Let it happen rather than the husband overcame The wife's reasonable efforts to maintain secrecy, Seems to be practicing "guilty till proven innocent" mechanisms.
You could make these kind of crimes impossible, By requiring companies To publish Intracompany communications ,to the public in real time.
Without all the secrecy, Is the public is better equipped to vet , Hold accountable, and guide buisnesses to Better symbiosis with the common people.
but To assume that the wife Let it happen rather than the husband overcame The wife's reasonable efforts to maintain secrecy
Whilst I agree, there is some unavoidable information leakage, I think getting "copies of Amazon's confidential financial figures from his wife" would indicate the wife wasn't making "reasonable efforts to maintain secrecy".
The guy's an idiot. In barely two years he reaps almost $1.5 million and he thinks nobody is going to notice
If I remembered correctly, there was another El Reg article about someone who had insider's information from an Amazon staff (wife).
Like this fellow, he created several dummy accounts to trade shares. That time, all the dummy accounts had one name, namely his. And to make matters worst, all the funds for the dummy accounts went to one bank account, theirs.
All financial institutions in the US, including brokerages, require your Social Security number (or EIN number if you are claiming to be a business) and report everything to the IRS. The only way you could attempt to hide these types of shenanigans would be to enlist other people to open brokerage accounts in their own names (and pay taxes on those gains) and give you a cut of the net profits in cash. The bottom line is even if you are completely amoral, the risk/reward usually doesn't work out in your favor and a smart person would conclude there are better legal ways to make money.
Back in the distant fog of time when dinosaurs roamed the mighty fens of Cambridgeshire, I worked for an online stockbroking company. Had full access to a dedicated X.25 link to the LSE, access to everything on the network, and the ability to see pretty much everything before it was made public. Even 20ish year old me wasn't stupid enough to do that shit. Maybe I could have been a millionaire. Having dealt with the SFO, FSO, FCA and their ilk I'm happy to just be a pauper and not in gaol.
Viky Bohra, 37, of Bothell, Washington, reaped a profit of $1,428,264 between January 2016 and October 2018 by buying and selling Amazon stock using eleven trading accounts managed by himself and his family.
Separately, he was also charged by the SEC and told to cough up $2,652,899 in disgorgement, interest, and penalties.[/QUOTE]
Made $1,428,26 and told to cough up $2,652,899 I think if that is what you want your wishing for the wrong thing.
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The missing figures are the risks of getting caught. Roughly speaking
gain = (1-P(nabbed)) * haul - P(nabbed)*(Cost(jail)+penalties+lossOfFutureEarnings)
In this case P(nabbed) was likely ~1, because they made a frontal assault and the evidence was overwhelming.
With more levels of indirection, say, providing stocking tips to old friends who are brokers, and getting your back scratched somewhere down the road via some else's stock tips, P(nabbed) is much smaller.
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