Prof. Coffee complains that judges "rarely update law to fit new circumstances." Wow. I thought it was the function of the legislative branch to update laws. And this guy is teaching at Columbia Law? Shame.
5
We might expect Congress to give up its own brand of insider trading when upcoming legislation favors market values. But they rejected that option -- asking the foxes how they like their chicken.
8
Trading in the stock market is, in and by itself a form of gambling. To add to it illegitimate insider trading is, outright theft. It is outrageous and disgusting. No wonder Bernie Sanders is so popular. I am sick and tired of the rich and famous abusing the system. This has got to stop if we don't want the real revolution a la Marie-Antoinette.
22
Curious:
If the "insider information" doesn't pan out what recourse is there for recovery of real or anticipated losses?
And, rare as it may be, because I on occasionally trade the same security in three accounts am suspect?
Lest I come across as a complete hypocrite, the yardstick probably does require tweaking. The Michelson case obviously doesn't pass the smell test"
"Mr. Mickelson allegedly bought 240,000 shares of Dean Foods stock in three separate brokerage accounts, then sold all his shares on Aug. 8, 2012, for a $931,000 profit as the stock surged 40% on news of the spin-off, authorities said." [in http://www.wsj.com/articles/former-dean-foods-chairman-thomas-davis-char...]
According to msn/money [see http://www.msn.com/en-us/money/stockdetails/history/fi-126.1.DF.NYS] there was a doubling to tripling of daily volumes in the period 7/13/2012 through 8/10/2012: price ranged from low of $12 to high of $17.50.
Now we all know or at least axpect that Phil is wealthy. But to "speculate" approximately $3M [$12.5/shr assumption] on someones "tip" [suggestion] is cavalier at best.
Conversely, would all those investors [or speculators if you must] who also purchased on the dip - high of $18.87 for 7/13 dropping to $12 on 7/27 - be exposed [operative word] to insider trading if other rules/limits were in place? Or worse yet will we have to document each and everyone of our respective trades to backstop potential regulatory investigation.
If the "insider information" doesn't pan out what recourse is there for recovery of real or anticipated losses?
And, rare as it may be, because I on occasionally trade the same security in three accounts am suspect?
Lest I come across as a complete hypocrite, the yardstick probably does require tweaking. The Michelson case obviously doesn't pass the smell test"
"Mr. Mickelson allegedly bought 240,000 shares of Dean Foods stock in three separate brokerage accounts, then sold all his shares on Aug. 8, 2012, for a $931,000 profit as the stock surged 40% on news of the spin-off, authorities said." [in http://www.wsj.com/articles/former-dean-foods-chairman-thomas-davis-char...]
According to msn/money [see http://www.msn.com/en-us/money/stockdetails/history/fi-126.1.DF.NYS] there was a doubling to tripling of daily volumes in the period 7/13/2012 through 8/10/2012: price ranged from low of $12 to high of $17.50.
Now we all know or at least axpect that Phil is wealthy. But to "speculate" approximately $3M [$12.5/shr assumption] on someones "tip" [suggestion] is cavalier at best.
Conversely, would all those investors [or speculators if you must] who also purchased on the dip - high of $18.87 for 7/13 dropping to $12 on 7/27 - be exposed [operative word] to insider trading if other rules/limits were in place? Or worse yet will we have to document each and everyone of our respective trades to backstop potential regulatory investigation.
1
Although a non-participant, I directly saw red "favor bank" operate throughout Silicon Valley during the dotcom era even at the largest and most respected technology companies. It's surely operating right now. Many of the perpetrators are well-armored against self-awareness by the financial culture. Many of them think of themselves as rugged, risk-taking individualists who, in practice, have gone Full Randian at the expense of the unconnected, weak and uneducated -- efficiently "doing God's work" to rationally allocate resources, "creating value," as "job creators." See below, for @Richard Luettgen's response, for an example of this kind of thinking in action.
4
If members of Congress partake in insider trading, shouldn't it be legal for everyone else to do it (http://www.cbsnews.com/news/congress-trading-stock-on-inside-information/)? How can Washington enact laws to stop others from doing what it can do without consequence? Never mind the specter of insider trading bringing down the whole system of equities trading.
7
"How to get away with Insider Trading"
Just have a job with the NSA or know somebody who does.
Simple !
Just have a job with the NSA or know somebody who does.
Simple !
3
By the time something appears in the Wall Street Journal, it already happened. If you’re not investing for long-term value, a little birdy knows more than Warren Buffett. Figuring out the connections among market participants could take government lawyers a lot of study, because they may not be connected in any way—not a way that can be proved.
3
Insider trading is really not well defined so that it can escape the vagary between the well informed participant and the person who is actually using knowledge that is withheld deliberately to mislead traders. I think that only when someone deliberately misleads traders by concealing information that might have been made public knowledge before any relevant transactions occur or before anyone not in the know can participate in transactions can a clear case of insider fraud be proven. Everyone who works in or has close connections with someone who works in an enterprise is in fact an insider and everyone who is not is an outsider. Eventually all information that is used to gain an advantage over others becomes known to all who care, so it is when the knowledge is made available that determines it's utility. If an insider waits to act upon information about which that person is aware before the public until it becomes public, that person can still act before anyone else because of advanced knowledge. The only way to keep insiders from having advantages over outsiders would be to use a disinterested third party to control the whole process, and that would end free markets and even partially free markets.
1
Interesting. My employer makes us all take insider trader training, despite the fact that most of us have absolutely no access to insider information. They showed someone's wheelchair bound father being carted off to the pokey after buying some stock based on something his employee- daughter shouldn't have told him -- "hey Dad I'm at a happy hour because we won a big contract!"
This article doesn't make it sound like disabled Dad would have been prosecuted. While I won't be slipping any secrets to anyone, not that I know any, I do feel like I've been sold a bill of goods from my employer about what's right and wrong in this area.
This article doesn't make it sound like disabled Dad would have been prosecuted. While I won't be slipping any secrets to anyone, not that I know any, I do feel like I've been sold a bill of goods from my employer about what's right and wrong in this area.
2
2 comments on Prof Coffee's approach 1) it has the appeal of ivory tower logic -making someone guilty if he acts recklessly disregarding whether inside info has been obtained illegally is fine for classroom contemplation and debate, the terms reckless disregard and "should know" make good fodder for discussion, but that would put everyone who trades at risk when they get info --should they conduct detailed inquires every time they hear a rumor? Really? But if not, who wants to be judged in 20-20 hindsight? What good is a safe harbor that still leaves people uncertain what to do? Does this allow for some potentially to profit from info that has been illegally obtained simply by "dont ask, dont tell?" Yes, but any other result would mean-taking unreasonable risk or not trading, which leads to second point.
2) Prices should reflect all available info, and if it takes an act by a person who just trades without asking any questions to get that info reflected in prices, even if that person may make money (not against the law yet) because he had access, either through luck, networking or work, to information others did not - that is not unhealthy for the overall market.
Bottom line -- it may sound unfair, politically incorrect, etc -- but there is compelling logic for why the SCOTUS decided to allow people to trade on info they have no knowledge to have been illegally obtained
2) Prices should reflect all available info, and if it takes an act by a person who just trades without asking any questions to get that info reflected in prices, even if that person may make money (not against the law yet) because he had access, either through luck, networking or work, to information others did not - that is not unhealthy for the overall market.
Bottom line -- it may sound unfair, politically incorrect, etc -- but there is compelling logic for why the SCOTUS decided to allow people to trade on info they have no knowledge to have been illegally obtained
1
Congress critters are among the most notorious inside traders with their inside knowledge of legislation that will effect markets. An examination of the progressive enrichment of long-term members above and beyond what their official salary and emoluments could have reasonably produced is evidence that they have capitalized on their position by their investments. The exponential increase in former Speaker Dennis Hastert's net worth during his time in office is a glaring example but nothing out of the ordinary.
10
While Professor Coffee's article offers a reasonable solution, it overlooks a large issue in its assumption that regulators would support such a provision. The SEC and the Department of Justice have deliberately resisted all efforts to provide definite guidance on the reach of Rule 10(b)(5) and insider trading cases. As a threshold matter, the prohibition against insider trading was a common law creature of ALJ and court decisions such as Texas Gulf Sulphur; there was no express regulatory or statutory prohibition against the practice until the SEC enacted regulations under the Williams Act. The regulators have pushed the envelope repeatedly beyond case law holdings, even though the common law rule of lenity doctrine requires that criminal offenses be narrowly proscribed and tailored in order to provide fair notice to defendants. A statutory definition of insider trading makes eminent sense, but I would not be sanguine that it will pass easily. I suspect that the regulators will be unable to agree on a definition of the offense.
3
Well, at least the gambling mafia got its money back! Phew.
3
Yes Jim Himes! We knocked on doors to help your getting elected, and we got more than our "money's" worth. Thank you.
2
Really?
If you want to get away with the ultimate insider trading, be a politician. Amazingly, the only female candidate has amassed $100 million as SOS. With a husband who has proven to be a liability. Favors, speeches, etc.
ps someone may want to look at Al Gore as well.
This wall street stuff is small potatoes.
If you want to get away with the ultimate insider trading, be a politician. Amazingly, the only female candidate has amassed $100 million as SOS. With a husband who has proven to be a liability. Favors, speeches, etc.
ps someone may want to look at Al Gore as well.
This wall street stuff is small potatoes.
7
Where was the NY Times when Mrs. Clinton played the system and did her single cattle futures deal that netted her 100k? If that wasn't insider trading Then you must have just fallen off the turnip truck. Th liberal media outlets refused to report on it and will not even publish an opinion letter by a reader that calls them out on their Hypocracy. First amendment? Ha. All the news that's fit, they print.
10
Any sort of legislation passed by the current Congress will surely make it even more difficult for the SEC to enforce laws or regulate insider trading. These guys benefit from wealthy financiers who pay their way into Congress. Don't call for legislation until we get a real Congress in the Capitol building -- one that will actually legislate on behalf of those wronged, and not on behalf of those engaged in wrongdoing.
20
If ever there were something likely to cause U.S. investors with U.S. capital to seek other markets in which to invest for profit, it's a Columbia law professor seeking the perfect sieve with which to catch people who behave in ways that HE finds personally offensive.
If in order to act on information an analyst must first pass both the information and the source against a five-mile-long decision-tree of ambiguous regulatory cautionaries, with a prison cell awaiting those who guess wrong, then we may as well just stop all investing in this country; and that would do wonders for job creation.
At what point does the incremental weight of all this regulatory nit-picking just kill growth?
If in order to act on information an analyst must first pass both the information and the source against a five-mile-long decision-tree of ambiguous regulatory cautionaries, with a prison cell awaiting those who guess wrong, then we may as well just stop all investing in this country; and that would do wonders for job creation.
At what point does the incremental weight of all this regulatory nit-picking just kill growth?
4
What growth? The growth of the 1%'s wad of cash? I don't think there is any danger to scaring off investors. When you have $20 million lying around, do you put it under the mattress? How about a savings account with 1/2% interest? Over half of Americans have no money in the stock market.
10
it doesnt kill growth because the market no longer creates concrete value it is simply gambling now and the inside traders are the card counters. You simply want the freedom to make money by fleecing others
10
Not quite true about Americans owning stock. In fact many do own stock indirectly through their retirement funds and mutual funds.
1
The brokerage business and in particular hedge funds would not be profitable nor in business were it not for marketing(retail brokerages), leverage and inside information(hedgies)which they refer to as research, however given that most stocks are valued based on "trailing" earnings(given the absence of a crystal ball)accompanied by disclaimers, trading stocks really is legalized gambling and the question remains much as it was almost a hundred years ago with Bernard Baruchs famous statement "where are all the customers yachts"? As far as getting away with it, that will never change, particularly when you have such a complicit S.E.C.and the Fed herding the cattle in search of yield to the slaughter. Really useful inside information would be are the boys at Goldman shorting the "dog sh-- wrapped in cat sh--" they're peddeling yet? It's also interesting to note that since Schwartzman, Kravitz, Goldman, Black and their respective companies went public in a gesture, I'm sure, of great magnanimity, wishing to share the wealth, that the stocks are all off their I.P.O. highs; although the eternal salesman Stevie Schwartzman did say when Blackstone tanked, "so, now you're getting Blackstone on sale." There really outta be a law!
8
"How to Get Away With Insider Trading"
Don't be a blond female...
Don't be a blond female...
10
This is a prime example of why preserving Social Security and Medicare is so important. Hedge Funds are just Vegas baby where the small investor losses.
24
First, I would suggest NOT using the person or people who got Phil Mikkelson into trouble. Which he deserved. You need some one more dishonest, someone who can do the "coverup" part more efficiently......
4
The biggest insider traders in this country are congress and their aides, then when investigated they claim that they're constitutionally protected from such inquiries given the nature of their work.
Good luck trying to combat a crime, when those making the laws are the biggest abusers.
Good luck trying to combat a crime, when those making the laws are the biggest abusers.
37
Mr Coffee acutely addresses the conflict between the goal of market efficiency, and its need for continuously developing information. To derive this market benefit, some compromise must be made with traders' "parity of information;" or some cost borne when nonpublic information is obtained illegally and then traded on.
In a Times' article by Mr Sorkin (11/29/2010); he notes that the trader Mr Raj Rajaratnam uses a "mosaic theory" of stock trading in his defense, after being charged with insider trading. Per Mr Sorkin, "mosaic trading" entails traders using "multiple tidbits of nonpublic information from various sources to build a 'mosaic' to try to get an edge on other investors." Mr Sorkin notes that as a subscriber to this "mosaic theory," Mr Rajaratnam contends "that none of the individual bits of scuttlebutt they pick up constitute material insider information: the edge they get, they say, comes from putting it all together. That is the 'value added' in Wall Street parlance."
Such a mosaic network of interrelated parts searching for market information would seem similar to a journalistic network of interrelated parts in search of political transparency. Or, as Mr. Ehrenhalt, writes of Jane Meyers' investigative book, "Dark Money," in The NY Times Book Review of 1/24/2016, "It is not easy to uncover the inner workings of an essentially secretive political establishment;" as Ms Meyers does.
Are both instances of cost/benefit weightings to compare and contrast?
11:10a M
In a Times' article by Mr Sorkin (11/29/2010); he notes that the trader Mr Raj Rajaratnam uses a "mosaic theory" of stock trading in his defense, after being charged with insider trading. Per Mr Sorkin, "mosaic trading" entails traders using "multiple tidbits of nonpublic information from various sources to build a 'mosaic' to try to get an edge on other investors." Mr Sorkin notes that as a subscriber to this "mosaic theory," Mr Rajaratnam contends "that none of the individual bits of scuttlebutt they pick up constitute material insider information: the edge they get, they say, comes from putting it all together. That is the 'value added' in Wall Street parlance."
Such a mosaic network of interrelated parts searching for market information would seem similar to a journalistic network of interrelated parts in search of political transparency. Or, as Mr. Ehrenhalt, writes of Jane Meyers' investigative book, "Dark Money," in The NY Times Book Review of 1/24/2016, "It is not easy to uncover the inner workings of an essentially secretive political establishment;" as Ms Meyers does.
Are both instances of cost/benefit weightings to compare and contrast?
11:10a M
3
New? I don't think so. The criminal code has always been: don't ask, don't tell. Only fools and stoolies talk.
3
Article ably points out weaknesses in the crazy-quilt of decisions on what is insider trading. Finding any coherent thread among them is hugely challenging.
The key objection to insider trading is to give buyers and sellers (the little guy) comfort that the securities markets are not rigged and that the little guy can trade with confidence.
Now most buys and sells are by presumably sophisticated institution. The little guy has no place in today's securities markets.
Insider and pool trading now seem standard on Wall Street.
A major overhaul without outlawing honest profit-seeking or without protecting the recklesss from taking their lumps is way overdue.
How much longer can US securities remain among the world's most favored? Now they are reliable mostly to insiders, working on a sure thing.
The key objection to insider trading is to give buyers and sellers (the little guy) comfort that the securities markets are not rigged and that the little guy can trade with confidence.
Now most buys and sells are by presumably sophisticated institution. The little guy has no place in today's securities markets.
Insider and pool trading now seem standard on Wall Street.
A major overhaul without outlawing honest profit-seeking or without protecting the recklesss from taking their lumps is way overdue.
How much longer can US securities remain among the world's most favored? Now they are reliable mostly to insiders, working on a sure thing.
5
The only answer is to define it (look at the Netherlands' laws) and then take their money, make them penniless (sorry I don't care about your kids, you never cared about anybody else's) and put them in jail. Make them pariahs of society.
15
If you care about your kids, you'll be more intelligent investing your savings. I don't care about your kids - they are your problem.
My ability to buy or sell stock based on information I gain from whatever sources I generate doesn't affect you or your kids. Suppose I know that the company you work for is going to do something great, and buy stock in your company, and it does great. It's going to do great no matter whether I buy the stock, so my earning money on trading your company's stock doesn't affect you or your kids. Now suppose I know that the company you work for has been doing poorly and its stock is about to crash - my shorting your company's stock doesn't change the fact that your company did poorly, so my making money of your company doing poorly has no increased effect on the fact that you and your kids suffer because your company was actually doing poorly.
If you're unable to face reality, there are several ways available to leave it.
My ability to buy or sell stock based on information I gain from whatever sources I generate doesn't affect you or your kids. Suppose I know that the company you work for is going to do something great, and buy stock in your company, and it does great. It's going to do great no matter whether I buy the stock, so my earning money on trading your company's stock doesn't affect you or your kids. Now suppose I know that the company you work for has been doing poorly and its stock is about to crash - my shorting your company's stock doesn't change the fact that your company did poorly, so my making money of your company doing poorly has no increased effect on the fact that you and your kids suffer because your company was actually doing poorly.
If you're unable to face reality, there are several ways available to leave it.
Every once in awhile a Times op-ed contributor gets it just right. Mr. Coffee is this week's spot on commentator.
11
It's amazing to me that Martha Stewart actually served time in prison. Not even for insider trading but for something like "lying to investigators". But Mickelson gets off with a slap on the wrist.
And then we have the totality of the financial bigwhigs who brought down our economy in 2008, all of whom have not only *not* been to jail, but got away with millions of dollars in compensation. Think Richard Fuld of Lehman Bros who brought down that bank, and started the domino effect on our economy. The year before Lehman's bankruptcy received $34M in compensation and nearly half a billion dollars total during his tenure at Lehman.
There's no justice in the world of finance.
And then we have the totality of the financial bigwhigs who brought down our economy in 2008, all of whom have not only *not* been to jail, but got away with millions of dollars in compensation. Think Richard Fuld of Lehman Bros who brought down that bank, and started the domino effect on our economy. The year before Lehman's bankruptcy received $34M in compensation and nearly half a billion dollars total during his tenure at Lehman.
There's no justice in the world of finance.
27
I'm no Mickelson fan, but he paid a fine north of a $million. That's a tad more than a slap on the wrist particularly when there wasn't a case that could be tried.
Everyone wants to blame Wall Street and its bankers, but it was the ratings agencies and companies like Countrywide Mortgage that perpetrated the financial implosion. The fraud Countrywide perpetrated could never have taken place if the ratings agencies did their job. Lot's of blame to go around, but don't get caught up pointing your finger at the wrong culprits -- it really isn't helpful.
Everyone wants to blame Wall Street and its bankers, but it was the ratings agencies and companies like Countrywide Mortgage that perpetrated the financial implosion. The fraud Countrywide perpetrated could never have taken place if the ratings agencies did their job. Lot's of blame to go around, but don't get caught up pointing your finger at the wrong culprits -- it really isn't helpful.
Instead of writing more law and more regulations our legislators should attempt to reform our regulatory agencies
That the SEC pursued a heroic stock analyst, Mr. Dirks, says much of what is wrong about current government.
Were any of the regulators who instigated the case against Mr. Dirks ever disciplined in any way?
I would be interested to know, but daresay we all already know the answer. None, I am sure.
That the SEC pursued a heroic stock analyst, Mr. Dirks, says much of what is wrong about current government.
Were any of the regulators who instigated the case against Mr. Dirks ever disciplined in any way?
I would be interested to know, but daresay we all already know the answer. None, I am sure.
5
If we are indeed talking about a case from the 1980s, tough regulation was but a dream. Reagan was president. Need I say more?!
6
Insider trading is wrong. Laws should be passed which define it and it should equal jail time and never allow those who are convicted of it to be in the securities business ever again. Insider trading hurts normal investors. It corrupts the system and we all pay the price. The repeal of Glass-Steagall was a disaster for the average investor. Both of the issues are only the tip of the iceberg.
20
Government doesn't like "defining it" - that locks them into specifics, and they hate that. They want the ability to prosecute who they please for whatever reason, and they want to make it impossible for anyone to do anything that isn't illegal.
2
This should not be a surprise to anyone except the totally uninformed. Since the wealthy class has bought undue influence over the workings of government, especially Congress, it is no surprise that their method for making money (many times illegal in the past) is now codified in the regulations governing insider trading making it more difficult to obtain prosecutions. It seems no one has the desire to deal with the fact that most, if not all , lobbying that goes on in Washington is nothing more that legalized bribery. Lobbyists should not be allowed to make any donations to a government individual or political party as part of the rules and regulations governing lobbyists. I can hear the cries of "first amendment " rights being violated which is the cry of the wealthy loosing their influence in bribing politicians. Of course the Supreme Court plays right along.
22
Of course anyone who has more money than me -- without a doubt in my mind -- obtained it illegally!!! Otherwise, how could they get it, and not me???
My goodness. Is everyone else as stupid as what they write on the NYUT Comments blog?
My goodness. Is everyone else as stupid as what they write on the NYUT Comments blog?
Raise taxes to the 1950s levels and the sports gamblers won't have the excess cash to waste. Same with art buyers and real estate hoarding. So many problems are caused by excess cash being wasted on vanity and addictions.
12
Good idea. Let's repeat WW2 and the Korean War so that the government has a "legitimate" reason to increase tax rates to those of the 1950's. All that excess cash is so corrupting -- let's create a re-distribution system that takes it from rich guys and gives it to us. We need it more. That will work great until we wean down all the rich guys and I become the next "rich" guy. Whoa -- that doesn't work at all.
In the meantime, please forward MY share or YOUR earnings ASAP -- I really need it soon.
In the meantime, please forward MY share or YOUR earnings ASAP -- I really need it soon.
1
The Newman ruling of 2013 is completely absurd! Yet another example of legalizing fraud by pretending there is no benefit to the person providing tip.
About 2 decades ago I was retained by investor relations departments for secondary offering presentations on Wall Street. In those days if I traded inside information I would have gone to jail. One of my neighbors did and IIRC he was sentenced to 7 years.
Imagine if it were 1997 again and you knew Steve Jobs was coming back to Apple. Think you could make millions on that knowledge?
One skilled in the art would inoculate himself by keeping a "cutout" person handy to pass along tips.
About 2 decades ago I was retained by investor relations departments for secondary offering presentations on Wall Street. In those days if I traded inside information I would have gone to jail. One of my neighbors did and IIRC he was sentenced to 7 years.
Imagine if it were 1997 again and you knew Steve Jobs was coming back to Apple. Think you could make millions on that knowledge?
One skilled in the art would inoculate himself by keeping a "cutout" person handy to pass along tips.
6
Imagine if you saw Steve Jobs's limo next to Gil Amelio's limo outside some hotel -- back in 1996/7.
1
Insider trading is illegal, we are told; the question is, how come it keeps being a recurrent theme, no definite action to oust the crooks? Given that we humans, all of us, are corruptible, especially if we suspect we can get away with it, particularly when power and money deludes us and makes us thing being above the law is our 'right', sensible regulation is of the essence...until somebody finds a new way to cheat, to enrich himself/herself at our cost. For now, the 'loopholes' remain big enough to drive a truck through, happily approved by bribed congressmen/women receiving a piece of the pie. Although all this racket is legal, it is far from ethical, a farce of justice, in complicity of those waiting their turn for the booty. Will we ever learn? Do we even want to? So far, greed remains king of the financial jungle. Depravity reigns.
9
Thanks for this excellent article. Always enjoy reading your opinions. Wish they came more often!
8
This has nothing to do with "Wall Street" except that the people bought stocks. These are corporate insiders given information to friends who trade on their Ameritrade accounts. Goldman, JPM, Citi, Morgan Stanley and "Wall Street" had nothing to do with this.
5
Hooray! Somebody else who reads the NYT gets it. I knew there had to be someone else. I totally agree.
2
I find it interesting that no one is getting prosecuted in this situation. While the article points out there are flaws in the law that prevent prosecution and these loopholes need tightening which I agree with- I find it nonetheless amazing when you compare this case with the case of Martha Stewart who actually went to jail for virtually the same thing. Weren't these same loopholes in place when she was prosecuted and sent to jail? I admit I don't know the details of both cases to accurately compare- but on the face of it, it seems Martha Stewart was treated much, much harsher than the bad actors in this case. Phil- count your blessings and stop your gambling- $1million in gambling debts?? Wow.
24
If I remember correctly, I think that at the end of the day, Martha went down for lying to investigators, much the way Al Capone was nailed on tax evasion.
2
I'm sure all the people who engage in insider trading also do other unethical things such as lying. At least Ms. Stewart used her own money, and not other people's money. As for how to get away with insider trading. It's easy. The same way that the partners of Bernie Madoff's feeder funds did. They took in millions. My former neighbor only stole $196,000 - that's thousand -- and he had to do jail time.
6
A lot of comments here speak of the inevitability of insider trading.
Perhaps the solution then is to have public or nonprofit companies that gather and immediately broadly disseminate valueable information.
Perhaps the solution then is to have public or nonprofit companies that gather and immediately broadly disseminate valueable information.
3
Or elect a president that takes the situation seriously - or stop pretending it's an issue at all. Hillary?
1
What this author is not aware of is that insider isn't limited to people. Wall Street has adopted technology to this quest to feed its greed. Companies that run computerized trading systems are taking advantage of their customers and customers' transactions. Computer trading systems have been programmed to now look at the queue of real time transactions to be executed to look for buying and selling trends. Once a trend is found, "insider trading" transactions are inserted into the stream of transactions. The transactions inserted are devised as either buy/sell or long/short that benefits the automated trading company. In other words, the trading company is using its customers' confidential transactions against them by putting in offsetting trades.
This is the same inmoral technical programming that banks did with debit transactions on checking accounts. Instead of processing customer transactions as they came in, banks would sort the customers' transactions so that the highest dollar transactions would hit first and try to cause overdrafts early on and reap overdraft fees for each subsequent transaction.
This is the same inmoral technical programming that banks did with debit transactions on checking accounts. Instead of processing customer transactions as they came in, banks would sort the customers' transactions so that the highest dollar transactions would hit first and try to cause overdrafts early on and reap overdraft fees for each subsequent transaction.
25
I think the pretense that Mickelson owed Mr. Walters gambling debt is just a facade. If Mickelson were to give money directly to Mr. Walters that would be illegal as you are rewarding the tipper. But since its a gambling debt which no one could prove (maybe I'm wrong here), Mickelson can get away.
4
The fix is always in. The SEC allows high frequency trading, which is front running. They got rid of the uptick rule. Fact is, no high ranking bankster was prosecuted for facilitating the financial crisis. Why? Because the government is complicit. They would have to prosecute themselves. I'll change my mind when I see Jamie Dimon or Lloyd Blankfein in court defending their actions. There is no accountability for the wealthy or well-connected in America and therefore no justice for the rest of us.
10
The Clintons got rich – hundreds of millions in a few short years – and I suspect some of that came from insider trading. They have been close friends with Wall Street insiders for decades, and I do not believe in coincidences.
“The “personal benefit” rule makes ignorance bliss. The sophisticated trader will understand that he is insulated from liability so long as he does not learn that a personal benefit was paid or promised. “Don’t ask, don’t tell” may become the new industry code of behavior. The rule overlooks how the “favor bank” can work in a cozy industry like finance.” Very cozy, indeed, for the Clintons.
By the way, the very expression “Don’t ask, don’t tell” came from Bill Clinton.
The law should also revoke any statute of limitations regarding insider trading.
5/23 @ 8:40 am
“The “personal benefit” rule makes ignorance bliss. The sophisticated trader will understand that he is insulated from liability so long as he does not learn that a personal benefit was paid or promised. “Don’t ask, don’t tell” may become the new industry code of behavior. The rule overlooks how the “favor bank” can work in a cozy industry like finance.” Very cozy, indeed, for the Clintons.
By the way, the very expression “Don’t ask, don’t tell” came from Bill Clinton.
The law should also revoke any statute of limitations regarding insider trading.
5/23 @ 8:40 am
6
And you expect us to believe that Trump who is a wheeler dealer of the first order has clean hands??
Your allegations are mere suspicions with no proof whatsoever. If you're going down that road- then include your GOP brethren which would also include most of Congress.
Your allegations are mere suspicions with no proof whatsoever. If you're going down that road- then include your GOP brethren which would also include most of Congress.
7
So, marian, your acceptance of Clinton's bad behavior is that of a 3-yr old child: "HE'S DOING IT TOO!!!!!!"
3
"He next turned to journalists, but they would not report on his findings for fear of libel suits. "
Everyone is afraid of something. Prosecutors are afraid of losing insider trading cases. SEC executives are afraid of annoying firms they dream of one day joining. To me, these are somewhat excusable offenses based on personal fear and greed. The obstacles to good financial journalism are institutional. When is the last time anyone won a libel case against a newspaper? It's a hollow excuse (which the author isn't making, just reporting)
The Times has Gretchen Morgenson, but she is alone, and because of that begins to sound shrill. The Wall Street Journal fawns over business celebrities. Ironically, Bloomberg, which makes its money directly from Wall Street, is the hardest on it.
In a perfect world Congress would make the right laws to prevent insider trading. In this world, all the players look to the news to see how they're perceived. The more journalists are allowed to push beyond fear of libel, the more they can "shine a light" on these behaviors.
I can't tell you from personal experience that you can show a reporter reams of proof about some financial wrong-doing, and unless the SEC or an AG pursues the case, these facts will not see single line of coverage. The public has picked up on this. As the author points out, the Dean Foods thing was going on for 5 years. Some journalist knew years ago, but couldn't publish.
The damage has already been done.
Everyone is afraid of something. Prosecutors are afraid of losing insider trading cases. SEC executives are afraid of annoying firms they dream of one day joining. To me, these are somewhat excusable offenses based on personal fear and greed. The obstacles to good financial journalism are institutional. When is the last time anyone won a libel case against a newspaper? It's a hollow excuse (which the author isn't making, just reporting)
The Times has Gretchen Morgenson, but she is alone, and because of that begins to sound shrill. The Wall Street Journal fawns over business celebrities. Ironically, Bloomberg, which makes its money directly from Wall Street, is the hardest on it.
In a perfect world Congress would make the right laws to prevent insider trading. In this world, all the players look to the news to see how they're perceived. The more journalists are allowed to push beyond fear of libel, the more they can "shine a light" on these behaviors.
I can't tell you from personal experience that you can show a reporter reams of proof about some financial wrong-doing, and unless the SEC or an AG pursues the case, these facts will not see single line of coverage. The public has picked up on this. As the author points out, the Dean Foods thing was going on for 5 years. Some journalist knew years ago, but couldn't publish.
The damage has already been done.
6
We don't need to prosecute we need to heavily tax stock gains for holdings owned less than 24 months
And a financial transaction tax too
Gains on stock should be taxed at least as high as earned income. They get to deduct losses. This is gambling...just tax it
And a financial transaction tax too
Gains on stock should be taxed at least as high as earned income. They get to deduct losses. This is gambling...just tax it
8
How would Congress pass an insider trading bill when they participate in this activity everyday. Let's be honest, our Congress is not flooded with millionaires because of their great entrepreneurial skills or to put it in real world terms: how does a wrestling coach turned Congressman become a multimillionaire--you fill in the blanks.
12
Cant't members of the Senate and Congress use insider information to fatter their own pockets ? Kill the head of the snake first .
8
Professor Coffee makes some good points, but, if he is concerned about judges getting too involved in interpretation of loosely defined terms and concepts, he has just shifted the the area of focus from personal benefit to market gossip.
Insider trading shares a pretty common characteristic with the old standard for indecent pornography--you know it when you see it. Most persons engaging in insider trading either know, or are in reckless disregard of the fact that, the information they have is not generally in the public domain and was derived from someone who had an obligation to not release it. Questions about whether the person releasing it obtained a personal benefit are silly. Benefits are in the eye of the beholder. They are not always monetary and can simply be some type of emotional benefit. Unfortunately, the attempts of Mr. Bharara and the SEC to expand the definition have caused courts to torture the concept in trying to do the right thing and the government enforcers have probably done more damage to the primary goal of the rule--to allow for a level and fair playing field--than good.
2
Yes, Congress should pass this legislation. Las Vegas bookies, as well as golfers who use inside information from CEOs should all be prosecuted. What a ridiculous standard the government now has to prove now!
4
When Wall Street does it, it's legal. (apologies to Richard Nixon)
4
Hasn't Congress given itself permission to do this? The Times hasn't investigated this to the best of my knowledge.
8
And yet too many people deride and heap scorn on Bernie Sanders as a wild eyed idealist when he says our economic system is rigged or that the business model of Wall Street is fraud.
11
Pick white European American parents.
3
FDR put stock market manipulator/grafter Joe Kennedy at the head of Wall Street reform because Joe knew all the tricks. Significant reform followed to stem the corruption in the market. The only difference today is that the fox is still guarding the henhouse, but the bloodhounds are locked in their kennel.
12
Insider trading is a tough nut to crack. It is rife throughout finance and the greatest beneficiaries are not prosecuted. I used to be an investment banker (long since out of the business) and had a conversation with an ex-colleague a few weeks ago about his dealings with a hedge fund manager. I won't reveal the name but suffice it to say that there are none bigger (no, this is not Steve Cohen or any of the other hedgies that have been prosecuted for insider trading).
My friend told me that this hedge fund manager routinely dealt in insider information - it was just part of the business. And, of course, he has become enormously wealthy.
But the issue is what to do about it. Very difficult to police every telephone call or personal conversation, nor should we. I don't have the answer.
My friend told me that this hedge fund manager routinely dealt in insider information - it was just part of the business. And, of course, he has become enormously wealthy.
But the issue is what to do about it. Very difficult to police every telephone call or personal conversation, nor should we. I don't have the answer.
3
This won't be mentioned here, but it's worth a mention:
The "crime" of insider trading should be abolished in its entirety.
This is not a fringe view - it's a view shared by many prominent and well-respected economists (Milton Friedman & Thomas Sowell, among others). Insider trading is as close to a victimless crime as you can come. "Insider trading" doesn't even exist in the commodity markets.
Friedman stated "You want more insider trading, not less. You want to give the people most likely to have knowledge about deficiencies of the company an incentive to make the public aware of that." Friedman did not believe that the trader should be required to make his trade known to the public, because the buying or selling pressure itself is information for the market."
People will misread my comments as a "carte blanche" for the wealthy to reap unlimited profits, which couldn't be further from the truth. By allowing every individual - from the lowly loading dock operator noticing increased shipments, to the accountant noticing increased billings, all the way up the line - information is spread quickly and evenly into the market. By restricting the use of that information, it makes the information itself so valuable that only those with the means use it. Hence the current regime of tempting outsized profits that can be earned through the use of information.
It's no different than the idea that making narcotics illegal creates the opportunities for large illicit profits.
The "crime" of insider trading should be abolished in its entirety.
This is not a fringe view - it's a view shared by many prominent and well-respected economists (Milton Friedman & Thomas Sowell, among others). Insider trading is as close to a victimless crime as you can come. "Insider trading" doesn't even exist in the commodity markets.
Friedman stated "You want more insider trading, not less. You want to give the people most likely to have knowledge about deficiencies of the company an incentive to make the public aware of that." Friedman did not believe that the trader should be required to make his trade known to the public, because the buying or selling pressure itself is information for the market."
People will misread my comments as a "carte blanche" for the wealthy to reap unlimited profits, which couldn't be further from the truth. By allowing every individual - from the lowly loading dock operator noticing increased shipments, to the accountant noticing increased billings, all the way up the line - information is spread quickly and evenly into the market. By restricting the use of that information, it makes the information itself so valuable that only those with the means use it. Hence the current regime of tempting outsized profits that can be earned through the use of information.
It's no different than the idea that making narcotics illegal creates the opportunities for large illicit profits.
4
As if the guy working on the loading dock has money to invest? Give me a break. This is just another excuse for letting the rich insider benefit and when the info "trickles down" to Joe Citizen it will be way to late to benefit!
10
I really like this idea. Get rid of the detail-infested and loophole-laden "inside trading" laws - maybe leave it to some general law that prohibits "gross fraud on the people" - and anyone holding inside information risks its value quickly deteriorating to de minimus. What a brilliant solution! So how do we get started?
Oh wait. That'll never happen because we'd have to get rid of all the rot and decay in Washington first. Never mind.
Oh wait. That'll never happen because we'd have to get rid of all the rot and decay in Washington first. Never mind.
4
Simple: insider trading equals jail. Not difficult to understand. Just another reason to vote ONLY Democrat 2016.
12
The question though, which you seem to have missed, is what exactly is insider trading? If we're going to be sending people to jail, we must tell them first what they are not allowed to do.
Jail time - long term jail time - is the only solution for the thieves and crooks and embezzlers who run the banks and Wall Street companies. And jail time for the leaders - like DImon and Cohen and Blankfein - who claim ignorance. They set the tone. If they are truly ignorant of what goes on in their companies then they should be fired - no parachute - as incompetent.
13
Why is trading on material inside information a "criminal" offense and not "civil"?
An individual who breaches a non-disclosure agreement (director, scientist, officer), or fiduciary role as "finder" (lawyer, accountant, banker) can be sued for damages.
This would seem to me to be a much better solution than writing a law which clever folks will find ways to circumvent, or laws which are so cumbersome that they prevent the free flow of information into the marketplace.
An individual who breaches a non-disclosure agreement (director, scientist, officer), or fiduciary role as "finder" (lawyer, accountant, banker) can be sued for damages.
This would seem to me to be a much better solution than writing a law which clever folks will find ways to circumvent, or laws which are so cumbersome that they prevent the free flow of information into the marketplace.
3
The current approach which prohibits trading on nonpublic information only when it has been wrongfully obtained or used creates too many loopholes. The key sentence in this article is "The United States (unlike some other nations) does not adopt a simple “parity of information” approach under which one cannot trade on material facts that are not publicly available."
Every other nation in the industrialized world has problems with insider trading. Congress - if it was serious about addressing this issue - would examine the policies of other nations and determine which work best. Rather than have to wrestle with issues in each case as to how insider information was obtained or how it was used, using material facts that are not publicly available in any manner for any trade would itself be illegal.
Unfortunately, too many people in Washington and Wall Street exchange information as part of the dynamic over the implications of public policy, campaign contributions, suggestions for changes to legislation, and analysis about future trends in various industries. Will the acquisition of Monsanto by Bayer be approved by the SEC? Will or will not the government mandate labeling of GMO foods? Which state legislatures introduce legislation to prohibit municipalities from requiring GMO labels? Who funds ALEC? Who in Federal and state legislative bodies received how much from which PACs? Which elected official bought or sold shares in which companies - and when?
Every other nation in the industrialized world has problems with insider trading. Congress - if it was serious about addressing this issue - would examine the policies of other nations and determine which work best. Rather than have to wrestle with issues in each case as to how insider information was obtained or how it was used, using material facts that are not publicly available in any manner for any trade would itself be illegal.
Unfortunately, too many people in Washington and Wall Street exchange information as part of the dynamic over the implications of public policy, campaign contributions, suggestions for changes to legislation, and analysis about future trends in various industries. Will the acquisition of Monsanto by Bayer be approved by the SEC? Will or will not the government mandate labeling of GMO foods? Which state legislatures introduce legislation to prohibit municipalities from requiring GMO labels? Who funds ALEC? Who in Federal and state legislative bodies received how much from which PACs? Which elected official bought or sold shares in which companies - and when?
5
So Phil Mickelson makes almost $1 Million on a single insider trading transaction to pay off a gambling debt, gets to stay out of jail and keep all his endorsements. Must be nice.
3
Go ahead and make insider trading legal if it's so difficult to define and enforce. Then tax the living daylights out of unearned income and a 95% tax rate on even 'earned' income over $1M.
8
Fantastic idea! I second the motion.
2
The alpha types who make untaxed fortunes on insider trading would have the rest of us believe that they have unique skills and brilliance, and that they have "pulled themselves up by their bootstraps" so it would be unjust for their ill-gotten gains to be taxed. It seems we will never eliminate this kind of rigged casino activity in our financial markets, so let's just impose simple, heavy taxes on it, eliminate loopholes like carried interest being treated as capital gains, reinstate a substantial estate tax on estates over $5million, invest the proceeds in public goods like infrastructure and education, and move on. The rest of us wage-earning, taxpaying citizens are suckers, subsidizing the casino to the enrichment of a small group of white-collar gangsters.
29
I am somewhat surprised that the major brokerage firms are not in the forefront to demand significant changes to strengthen insider trading trading laws. Then again maybe I should not be. After all they are part of the rigged system and seem content with it.
6
Most people should avoid the market altogether and invest in real estate you can control that.
1
the most famous last words spoken by tens of millions in the fall of Oct 2008.
5
You can control real estate?! LOL. Did you miss the collapse of the entire financial world due to real estate?!
4
the investment world is so much play and played on and upon ... one is either rigged or thrives as a rigger.. insider trading is standard procedure.. but with blinders to a select some... all the dishes and cutlery can be left on this table
with a deft rapid pull out of the the tablecloth!!!!!
with a deft rapid pull out of the the tablecloth!!!!!
3
So, as I understand it, "Insider Trading" is when you get privileged information that allows you to buy low and, later, sell high in the knowledge that the price will go up. Sort of like knowing the winning numbers of a lottery in advance. Basically, its cheating at cards, or roulette, or the lottery.
Why not just change the laws to extend "long term" profits, or to raise the capital gains tax on Wall Street winnings? I mean, it's not like these people, even the "honest gamblers" actually worked for this money. They made a bet. They gambled. Their money made money, and nothing was produced.
Gambling is "unearned income." Why not legally treat it that way?
Why not just change the laws to extend "long term" profits, or to raise the capital gains tax on Wall Street winnings? I mean, it's not like these people, even the "honest gamblers" actually worked for this money. They made a bet. They gambled. Their money made money, and nothing was produced.
Gambling is "unearned income." Why not legally treat it that way?
19
Too much left/right politics being projected in many of the comments. This is a straight forward bipartisan proposal that should receive legislative action. I see no liberal vs conservative conflict. The real concern is the probability that Congress can't even act on something as simple as this.
8
Insider trading and bribery are effectively legal in this country. Only the dumb and/or targeted get caught. When was the last time anyone in congress was prosecuted for some illegal something that happens there everyday of the week. How did Ryan get rich, he has never held a job outside of government.
7
Insider trading rules/laws just gives government way too much power. Like the war on drugs, insider trading enforcement should be abolished. At best, only those with a fiduciary duty to shareholders should be restrained from trading on non-public material information. That requirement is covered by other existing laws. Defang over-zealous regulatory agencies. Abolish insider trading laws.
5
And while we are at it dissolve the EPA, too.That will do the trick.
Sigh.
Sigh.
4
The problem with abolishing these laws is that shareholders--owners--need to be sure that the employees and representatives of the firm are representing them under the terms of employment. This is mostly the way such material information will be leaked, via employees. I don't want someone benefiting at my expense because he/she is a friend of management. It's the shareholders' firm, and benefits from information or ongoing operations should accrue to the owners.
3
Mike - In case you haven't noticed, insider trading still happens. The SEC does little to stop it. Most of what the SEC does is threaten folks with the giant stick of the government and then settle. The SEC spends so much time investigating everyone that they can't find the real crooks like Bernie Madoff. There is nothing the SEC does that makes investing safer for anyone. Like the absurd warning labels on pillows and other consuder...no one pays attention...Except the lawyers.
1
Just more proof that the fix is in and that there are several tiers of justice in the USA. A young black kid shoplifting a dollar candy bar gets more jail time than a white guy in a suit and a Yale MBA who steals millions and gets a house in East Hampton.
196
Its hilarious and sad that the wall streeters critique the NY times for reporting on the story, because the NY times did not change the laws nor the lawmakers who made the laws. Similarly, reporting an important reality as an excuse to take a cheap shot at the "financial" progressives, currently embodied in Bernie Sanders campaign, by calling us naive dreamers is an NBA-class kick in the groin. Times do change. The burn you smell is the world frying the ecosystem that makes civilization possible, or the Constitution, as profit as an economic and political dirver destroys the economy, and the political system. Or maybe its the hair of the wall street traders, economists, and the political leaders who are bought and sold lon an insider commodities market.
31
Since the only way to make a profit by stock trading is by learning something that others do not know all such trading is by definition inside. The simplest solution would be a heavy tax on all stock-trading profits.
76
Paul, I would agree with you except when you consider this country has an extremely poor system for saving/preserving for retirement. We may want to consider a means test for the amount of taxes levied on capital gains.
Anyone saving for retirement is most likely to put their hard earned savings in the stock market via a 401K, IRAs. It is already a very risky vehicle to save for your old age- and the volatility of the stock market makes most retirement almost as risky as blowing your retirement in Vegas- at least that's how it feels.
Since this country doesn't have a decent vehicle for retirement ( other than social security which only accounts for about half if what you need in retirement if you're lucky)- then putting a huge tax on investment profits would cripple people's retirement- just when their trading funds are needed most.
I would live to see all retirement monies go into SS with a predicable and stable monthly income and get rid of risky retirement. But, until that time- if it ever comes which I doubt- we cannot have higher taxes on trading profits for working people that are not wealthy.
Anyone saving for retirement is most likely to put their hard earned savings in the stock market via a 401K, IRAs. It is already a very risky vehicle to save for your old age- and the volatility of the stock market makes most retirement almost as risky as blowing your retirement in Vegas- at least that's how it feels.
Since this country doesn't have a decent vehicle for retirement ( other than social security which only accounts for about half if what you need in retirement if you're lucky)- then putting a huge tax on investment profits would cripple people's retirement- just when their trading funds are needed most.
I would live to see all retirement monies go into SS with a predicable and stable monthly income and get rid of risky retirement. But, until that time- if it ever comes which I doubt- we cannot have higher taxes on trading profits for working people that are not wealthy.
2
IRAs and 401Ks under a set cap should be exempt. Or people should be able to transfer their retirement account balances to Social Security. I resent the fact that my measly "retirement" fund bounces up and down in value like someone riding bareback on a camel.
3
I don't know why our government would ever pass a law that would take money out of their pockets as I'm sure this would...
15
Insider Trading is and has been pervasive for as long as we've had the stock market. Americans like to pretend we're not a fundamentally corrupt society because it perpetuates the myth about "American Exceptionalism" and our silly fantasy that we're better than everyone else, especially Third World Banana Dictatorships where bribery is commonplace.
However, the truth is that our bribery is out in the open in ways such as massive "donations" to politicians' campaigns (for which we're all supposed to pretend with a wink and a nod that there is no quid pro quo), and by providing our "friends" and "colleagues" insider information that enables them to obtain substantial profits in the stock market.
Every once in a while the government tries to make an example of someone, e.g., Martha Stewart, as a means of scaring rich people straight, but when there's millions and billions at stake, and serious traders know the wolf is guarding the henhouse, folks are going to do what they do to line their pockets.
So the wealthy and privileged sustain and increase their fortunes in our corrupt system while the poor and middle class are left clamoring for basic needs, such as healthcare, and hoping the oligarchy will someday allow it.
Neither of the likely nominees for president have any intention of challenging the system that makes the rich richer and the poor and middle class poorer, but I guess we get what we deserve. Until the American people truly demand change the status quo rules.
However, the truth is that our bribery is out in the open in ways such as massive "donations" to politicians' campaigns (for which we're all supposed to pretend with a wink and a nod that there is no quid pro quo), and by providing our "friends" and "colleagues" insider information that enables them to obtain substantial profits in the stock market.
Every once in a while the government tries to make an example of someone, e.g., Martha Stewart, as a means of scaring rich people straight, but when there's millions and billions at stake, and serious traders know the wolf is guarding the henhouse, folks are going to do what they do to line their pockets.
So the wealthy and privileged sustain and increase their fortunes in our corrupt system while the poor and middle class are left clamoring for basic needs, such as healthcare, and hoping the oligarchy will someday allow it.
Neither of the likely nominees for president have any intention of challenging the system that makes the rich richer and the poor and middle class poorer, but I guess we get what we deserve. Until the American people truly demand change the status quo rules.
149
What does the electorate demanding change look like? I think it looks like Trump voters and Sanders voters. Did you expect to start with marches in the streets, the appearance of some miracle candidate who gets the platform right and has charisma, or wild gyrations at the ballot box? I think the latter; we're seeing it.
There is absolutely no way to curb this behavior. Knowledge cannot be unknown. If you have a huge pile of money about to dissolve, is it really reasonable to tell somebody that they must ignore their knowledge and go broke elegantly. I think the salient point is whether there is evidence of INTENT to acquire the insider knowledge, otherwise we are tilting at windmills.
5
Mr. Coffee makes a valid point, but nothing will happen. Far too many Americans have no idea what insider trading means. To them, it means that they traded someone for something while indoors. Meanwhile, the bread-and-butter of Wall Street traders is to find information that is not available to the public. One nugget here, another nugget there, and pretty soon you have knowledge that increases your chances of a payoff. It's an ugly business that needs far greater controls.
75
CLOSE LOOPHOLES That enable insider traders and their reckless flaunting of fiscal responsibility. The gamblers with the nation's financial markets perpetrate economic terrorism, enabled by the banksters who make powerful partners in crime. I hope that Obama will have generated a pile of Executive Orders protection Homeland Security by increasing economic stability with whatever powers the Executive and the Commander in Chief can muster.
16
"This is why I support Bernie Sanders and oppose ...."
What naïveté !!.... Reread the article and understand the complexity. Think !
The ballot box isn't some magic device and Bernie is no magician.
Change is work....
The 'Bern' so many feel is the collective searing effect of wishful thinking....
What naïveté !!.... Reread the article and understand the complexity. Think !
The ballot box isn't some magic device and Bernie is no magician.
Change is work....
The 'Bern' so many feel is the collective searing effect of wishful thinking....
60
Bernie is a rational being like all of us. Being rational, he would dump his shared as quickly as a bad taco if he heard that they were about to become worthless. There are no saints in this business. Thats why I am a doctor and not a broker.
8
It is naive to think we can do anything about this. Smart people know that the only answer is to fight one's way to the top and become one of the people who get the gravy.
How to get away with *anything* in today's United States: do it while wearing a suit. Or while being famous. Or while being rich.
189
You know, I get ripped off by blue-collar types all the time. From the auto mechanic who charges me for services I didn't need, to the fast food worker who shorts my food order (discovered only when I'm home eating it), you're far more likely to get chiseled by an average individual than you are from some "high powered suit."
Or more simply be in U S House of Representatives or a U S Senator...
they are immune from insider trading laws, no conflict here and even the Women usually wear suits as the men always do.
they are immune from insider trading laws, no conflict here and even the Women usually wear suits as the men always do.
2
And the reason the New York Times publishes stories like this is....? Hmmmm. To be on the side of righteousness? To pretend reporting is a profession that provides check and balances? To, hmmm, make a difference? To create change? Or maybe it's just to fan the fire of outrage that that sells newspapers. Because what it is not, for sure, is something that makes a difference or creates change. And how do we know it makes no difference and creates no change? We keep reading the same story year after year back, certainly to the mid 80s, the heyday of insider trading. NOTHING ever changes.
46
isn't that obvious? why would anyone who benefits from the status quo want to change it?
2
These are opinion pieces, not news stories. The NYT allows lots of people with different views to write opinion pieces (remember Vladimir Putin's?). I understand your frustration, but at least figure out what you're reading before you criticize it.
If this piece fans the fire of outrage, great. You seem to think that publishing articles like this is worthless because "nothing ever changes." Okay, so what's your big idea? How do you propose we actually make the change you apparently want to see?
If this piece fans the fire of outrage, great. You seem to think that publishing articles like this is worthless because "nothing ever changes." Okay, so what's your big idea? How do you propose we actually make the change you apparently want to see?
7
Yes, Paxinmano, I used to get the Wall St. Journal and found exactly the same thing. And they never had articles on what was "wrong" with business. After a while, the disconnect between what they said and what businesses did left me irate that I was paying for what was essentially a propaganda rag.
2
This is why I support Bernie Sanders and oppose Hillary Clinton.
Remember, Chelsea Clinton's father in law went to jail for offenses like this, and her husband receives a lot of money from other people who donate to the Clintons, too.
How can we support someone who takes money from big banks! That is why it is wrong to criticize Bernie Sanders, since he is the only candidate with the integrity to stand up for justice and honest Americans!
Remember, Chelsea Clinton's father in law went to jail for offenses like this, and her husband receives a lot of money from other people who donate to the Clintons, too.
How can we support someone who takes money from big banks! That is why it is wrong to criticize Bernie Sanders, since he is the only candidate with the integrity to stand up for justice and honest Americans!
64
You forgot the 3rd cousin who by way of their sixth nephew was draft dodger? The fact Bernie Sanders owns stick in Goldman Sachs while taking campaign contributions from Goldman in his first run for Senate dont count? And those horrible frackers? Jane Sanders owns stock in them also. Why do you think Saint Bernie does not release his taxes? Mini Trump? Trump not as wealthy as he proclaims? Bernie wealthier than he claims? BTW those were in last taxes of Bernie we did see.
41
This particular message from Sanders is wonderful indeed.
However like other progressive liberals, namely deblasio, they refuse to show tough love and call out the folks who become dependent upon the govt for everything.
However like other progressive liberals, namely deblasio, they refuse to show tough love and call out the folks who become dependent upon the govt for everything.
4
"Insider Trading" cannot be defined "in a comprehensive way" because that gives Congress and its puppet the SEC a free hand in prosecuting anyone for just about anything related to trading, by labeling is "insider".
There is nothing wrong with "insider trading" - Congressional leaders do it themselves every day (c.f., "Throw Them All Out" by Peter Schweizer - Pelosi enriched her and her husband's commercial real estate holdings via "riders" added to a bill creating a BART station, etc.). Everyone should assume that insider trading happens and is going to happen, and no one is thereby harmed.
But perhaps that's too much freedom - Congress doesn't like it when the peons are free.
There is nothing wrong with "insider trading" - Congressional leaders do it themselves every day (c.f., "Throw Them All Out" by Peter Schweizer - Pelosi enriched her and her husband's commercial real estate holdings via "riders" added to a bill creating a BART station, etc.). Everyone should assume that insider trading happens and is going to happen, and no one is thereby harmed.
But perhaps that's too much freedom - Congress doesn't like it when the peons are free.
21
Don't forget Secretary Clinton's commodities trading "profit" when WPC was governor...
8
A publicly-traded company could, if it wanted, enforce a "do not trade" rule on its officers and its employees, punishing any of them for its own definition of "insider trading". A company interested in its reputation would not only create such a policy and enforce it, but would also publicly pronounce this policy, which could serve to attract investors who would otherwise be wary of investing in companies that do not have such a policy.
Assuming that such a policy was attractive to investors, more companies would follow suit - in order to attract investment that would otherwise go to competitors. In a true free market, you would find a mix of companies that do not engage in insider trading, and companies that do. The market would determine, organically, which is appropriate.
But Congress never met a market that it didn't want to restrict. Next we'll start seeing regulations on lemonade stands. Oops - too late:
http://blogs.findlaw.com/law_and_life/2013/08/5-legal-issues-with-your-k...
Assuming that such a policy was attractive to investors, more companies would follow suit - in order to attract investment that would otherwise go to competitors. In a true free market, you would find a mix of companies that do not engage in insider trading, and companies that do. The market would determine, organically, which is appropriate.
But Congress never met a market that it didn't want to restrict. Next we'll start seeing regulations on lemonade stands. Oops - too late:
http://blogs.findlaw.com/law_and_life/2013/08/5-legal-issues-with-your-k...
1
Phil Mikkelson almost got away with it......just imagine all the "insider trading" of which we are never made aware. Mikkelson, Tom Brady, Joe Paterno, Lance Armstrong - just to name a few in the sport world who got away with cheating for a long time, and I am sure many still are. If Mikkelson's case had never been revealed, I wonder if he would have "paid back" all that money? Whaddaya think?
76
The courts cheerfully interpret the law so it is useless in practice, without any awareness or concern about the effects of their decision. They have made it legal to trade on inside information unless it can be proven that the trader knew that the information had been purchased. So as long as the trader can make sure his sources do not tell him or her, the trading is legal.
This interpretation repeals the law in practice while leaving it there in theory. The correct legal decision would be to notify Congress that it had passed an unworkable law and to decide the case in whatever way the judges thought would get Congress to fix the law. Only by such actions can the integrity and honor of the judiciary be defended. Repealing a law in practice while leaving it in theory enables Congress in its frequent quest to pass laws that look like they will solve problems while in reality leaving the problems to fester.
This interpretation repeals the law in practice while leaving it there in theory. The correct legal decision would be to notify Congress that it had passed an unworkable law and to decide the case in whatever way the judges thought would get Congress to fix the law. Only by such actions can the integrity and honor of the judiciary be defended. Repealing a law in practice while leaving it in theory enables Congress in its frequent quest to pass laws that look like they will solve problems while in reality leaving the problems to fester.
27
Congress does not solve problems. From where I sit they have managed to have a steady salary and the best healthcare (but don't want us to have any of either) and they are probably the biggest inside trade recipients of all. Just because we don't hear about it doesn't mean it is not rampant.
ps they also have the best vacation schedule in the USA
ps they also have the best vacation schedule in the USA