boutons_deux
12-12-2014, 05:43 AM
Second Circuit Decision Effectively Legalizes Insider Trading (http://www.nakedcapitalism.com/2014/12/bill-black-second-circuit-decision-effectively-legalizes-insider-trading.html)
What does this mean in practical terms? The court has just provided a very-easy-to-satisfy roadmap for engaging in insider trading legally.
Don’t give the person who gave you the choice tidbit any explicit payoff. You can give him all sorts of buttering up before hand (fancy meals, hot women, illicit substances, box seats, whatever you think will induce cooperation and show your seriousness and ability to pay) and just engage in vague winks and nods.
As long as you don’t pay the tipster for the trade in any crass or traceable way (and no communications that point to an explicit payoff), you are good to go. Compensation down the road, in hard dollar or soft forms is perfectly kosher.
Needless to say, the implications are terrible. Thanks to high frequency trading, way way too cozy a relationship between the Fed and its preferred banks, and years of suspicious trading patterns (markets too consistently not breaching technically significant price levels, with the trading looking decidedly not organic) has sapped the faith of retail and even smaller institutional investors in the integrity of markets. The Second Circuit has just announced open season on pervasive misuse of inside information.
And this decision pretty much puts the SEC out of the enforcement business, unless the agency gins up the nerve and skills to take on targets other than insider trading. The SEC had pretty much retreated to pursuing only insider trading cases; to the extent it does anything else, its policy is to (at most) file a claim and negotiate a settlement.
But its targets know that the agency’s reluctance and presumed inability to go further makes it a paper tiger. That in turn leads to the widely ridiculed “virtually no admission of facts” settlements, which leaves courts (when asked to approve settlements) and the public in the dark as to whether the punishments were remotely adequate. It also deprives private plaintiffs to leverage the government case to seek restitution.
http://www.nakedcapitalism.com/2014/12/bill-black-second-circuit-decision-effectively-legalizes-insider-trading.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capi talism%29
working assumption: the entire financial sector is 100% corrupt, unless proven otherwise.
With the financialization of America, America is irrevocably corrupted.
What does this mean in practical terms? The court has just provided a very-easy-to-satisfy roadmap for engaging in insider trading legally.
Don’t give the person who gave you the choice tidbit any explicit payoff. You can give him all sorts of buttering up before hand (fancy meals, hot women, illicit substances, box seats, whatever you think will induce cooperation and show your seriousness and ability to pay) and just engage in vague winks and nods.
As long as you don’t pay the tipster for the trade in any crass or traceable way (and no communications that point to an explicit payoff), you are good to go. Compensation down the road, in hard dollar or soft forms is perfectly kosher.
Needless to say, the implications are terrible. Thanks to high frequency trading, way way too cozy a relationship between the Fed and its preferred banks, and years of suspicious trading patterns (markets too consistently not breaching technically significant price levels, with the trading looking decidedly not organic) has sapped the faith of retail and even smaller institutional investors in the integrity of markets. The Second Circuit has just announced open season on pervasive misuse of inside information.
And this decision pretty much puts the SEC out of the enforcement business, unless the agency gins up the nerve and skills to take on targets other than insider trading. The SEC had pretty much retreated to pursuing only insider trading cases; to the extent it does anything else, its policy is to (at most) file a claim and negotiate a settlement.
But its targets know that the agency’s reluctance and presumed inability to go further makes it a paper tiger. That in turn leads to the widely ridiculed “virtually no admission of facts” settlements, which leaves courts (when asked to approve settlements) and the public in the dark as to whether the punishments were remotely adequate. It also deprives private plaintiffs to leverage the government case to seek restitution.
http://www.nakedcapitalism.com/2014/12/bill-black-second-circuit-decision-effectively-legalizes-insider-trading.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capi talism%29
working assumption: the entire financial sector is 100% corrupt, unless proven otherwise.
With the financialization of America, America is irrevocably corrupted.