FCP Bob 1,312 Posted November 14, 2011 Share Posted November 14, 2011 Yesterday on 60 Minutes they did a story on how Members of Congress can legally trade on Insider Information that is only known to them as part of their jobs as Legislators. Well scumbags will be scumbags and it seems that it's very common and it's both Republicans and Democrats.Here's a link to one example.http://www.slate.com/blogs/weigel/2011/11/...gue_trader.html Link to post Share on other sites
mrdannyg 274 Posted November 14, 2011 Share Posted November 14, 2011 Yesterday on 60 Minutes they did a story on how Members of Congress can legally trade on Insider Information that is only known to them as part of their jobs as Legislators. Well scumbags will be scumbags and it seems that it's very common and it's both Republicans and Democrats.Here's a link to one example.http://www.slate.com/blogs/weigel/2011/11/...gue_trader.html I don't know what is sicker - that this option is available, that they use it, or that they are such sick, selfish pricks that they're using for such small amounts! Of course if they made millions, that would get all sorts of attention, so they have the discourtesy to still take advantage of it for amounts of money that just can't be overly significant to them.Dems, Reps, whatever. What a bunch of slimy crooks. Link to post Share on other sites
strategy 4 Posted November 14, 2011 Share Posted November 14, 2011 can anyone guess why this isn't law?http://www.govtrack.us/congress/bill.xpd?bill=h110-2341 and it was really old news back then, too!glaring, obvious evidence that our representatives operate on a completely different standard than the rest of us. I can't believe it's taken this long for the mainstream media to pick it up. I mean, literally, the only website that seems to harp on it with any regularity is zerohedge, and nobody gives a shit what that retard thinks because he mixes so much fiction and hyperbole in with his facts. Link to post Share on other sites
strategy 4 Posted November 14, 2011 Share Posted November 14, 2011 oh, just so we're clear, I think insider trading laws are idiotic and only work to hurt the average joe. you can make some nice coin legally in the markets, but it's a lot less risky and a fuckload more profitable to acquire and trade on insider info, which is exactly what many hedge funds do. Link to post Share on other sites
ahosang 0 Posted November 14, 2011 Share Posted November 14, 2011 and it was really old news back then, too!glaring, obvious evidence that our representatives operate on a completely different standard than the rest of us. I can't believe it's taken this long for the mainstream media to pick it up. I mean, literally, the only website that seems to harp on it with any regularity is zerohedge, and nobody gives a shit what that retard thinks because he mixes so much fiction and hyperbole in with his facts.Agreed. i read zerohedge for the summary of certain developments etc, but he is a doomsayer. Like you said too much hyperbole. But certainly if you read such sites, these sorts of issues shouldn't be news to you. Link to post Share on other sites
Balloon guy 158 Posted November 14, 2011 Share Posted November 14, 2011 I don't know what is sicker - that this option is available, that they use it, or that they are such sick, selfish pricks that they're using for such small amounts! Of course if they made millions, that would get all sorts of attention, so they have the discourtesy to still take advantage of it for amounts of money that just can't be overly significant to them.Dems, Reps, whatever. What a bunch of slimy crooks.Hello 'paybacks to our financial donors' being overlooked."Hey Mr. Big Contributor, I wanna thank you for your last donation with a little bit of info that might help you get that money back, and there's more of this in the future if you keep playing ball"Besides, Hillary made $100,000 in cattle futures in the 80s, this isn't news. Link to post Share on other sites
strategy 4 Posted November 14, 2011 Share Posted November 14, 2011 Hello 'paybacks to our financial donors' being overlooked."Hey Mr. Big Contributor, I wanna thank you for your last donation with a little bit of info that might help you get that money back, and there's more of this in the future if you keep playing ball"goldman frontran the news about the suit filed against them by the SEC over the paulson/mortgage debacle. it wasn't widely publicized news or anything, but there was a bit of evidence in the markets that someone big was well positioned for it.similar to someone placing a bunch of unusually large bets against the airlines in the futures markets a few days before 9/11. can't actually prove who was behind it, but it's pretty obvious who it was. Link to post Share on other sites
LongLiveYorke 38 Posted November 14, 2011 Share Posted November 14, 2011 oh, just so we're clear, I think insider trading laws are idiotic and only work to hurt the average joe. you can make some nice coin legally in the markets, but it's a lot less risky and a fuckload more profitable to acquire and trade on insider info, which is exactly what many hedge funds do.Hmm, this is an interesting point. With the rise of the internet, is anything really "inside" anymore? And yet wouldn't ending those laws create more of an "old boys club" style of Wall Street? Link to post Share on other sites
strategy 4 Posted November 14, 2011 Share Posted November 14, 2011 I just realized I missed a chance to make a great analogy. the best hedge fund managers are like faceoff specialists in hockey. yeah, they got incredible reaction times, some of them use huge blades on their sticks, but at the end of the day it's about cheating as much as you can without getting thrown out. And yet wouldn't ending those laws create more of an "old boys club" style of Wall Street? wikipedia's got some of the arguments I'd make. maybe I'm just being defeatist, but I don't think it's possible to stop it, so why not let the quickest gun/best algo/etc. discern what the insiders know based on buying/selling activity? Link to post Share on other sites
hblask 1 Posted November 15, 2011 Share Posted November 15, 2011 I just realized I missed a chance to make a great analogy. the best hedge fund managers are like faceoff specialists in hockey. yeah, they got incredible reaction times, some of them use huge blades on their sticks, but at the end of the day it's about cheating as much as you can without getting thrown out.wikipedia's got some of the arguments I'd make. maybe I'm just being defeatist, but I don't think it's possible to stop it, so why not let the quickest gun/best algo/etc. discern what the insiders know based on buying/selling activity?Yeah, I've seen some very convincing arguments that insider trading is good for the average joe, because it gets relevant information out to the markets as soon as possible. Sure, someone has a 5 minute headstart, but as you say, that's going to happen anyway, so why not use that information instead of surpress it? Link to post Share on other sites
LongLiveYorke 38 Posted November 15, 2011 Share Posted November 15, 2011 Not really knowing anything about it, I could probably be convinced that Insider Trading laws should be done away with.I could certainly be convinced that the punishments for such crimes seems way too harsh. People get decades in jail, where as many violent criminals get years. I'm not sure how that makes sense, all they're doing is investing... Link to post Share on other sites
BaseJester 1 Posted November 15, 2011 Share Posted November 15, 2011 Not really knowing anything about it, I could probably be convinced that Insider Trading laws should be done away with.I could certainly be convinced that the punishments for such crimes seems way too harsh. People get decades in jail, where as many violent criminals get years. I'm not sure how that makes sense, all they're doing is investing...Here's a possible scenario:President of BP gets report of oil discovery from his geology team.President of BP buys BP stock.Stock goes up.President of BP get report from operations that his oil rig is leaking.Sells stock.Public learns of leak.Stock goes down.Other stockholders lose their ass.I'm quite confident that I don't want to be one of the other stockholders in this scenario. If there are no insider trading laws, I would say your average guy (e.g., myself) would be smarter to stay out of stocks. I'm not saying that would necessarily be bad, just much different.As for the punishment for violent crime versus white collar crime, I think we're way too lenient on the white collar criminals. I'm sure that guys robbing the 7-11 would be embezzling if they had that option, so I don't think one can argue that they're worse people. And the harm to society is much greater due to the white collar criminals. Link to post Share on other sites
mrdannyg 274 Posted November 15, 2011 Share Posted November 15, 2011 Not really knowing anything about it, I could probably be convinced that Insider Trading laws should be done away with.I could certainly be convinced that the punishments for such crimes seems way too harsh. People get decades in jail, where as many violent criminals get years. I'm not sure how that makes sense, all they're doing is investing...Well, they're stealing money...Also, when was the last time an insider trading guy got decades in jail? People get a few years, but decades are saved for guys like Madoff who went outright theft and fraud, not just insider. Link to post Share on other sites
LongLiveYorke 38 Posted November 15, 2011 Share Posted November 15, 2011 Also, when was the last time an insider trading guy got decades in jail? People get a few years, but decades are saved for guys like Madoff who went outright theft and fraud, not just insider. http://www.bloomberg.com/news/2011-10-10/h...ngest-ever.html Link to post Share on other sites
mrdannyg 274 Posted November 15, 2011 Share Posted November 15, 2011 http://www.bloomberg.com/news/2011-10-10/h...ngest-ever.htmlGoddamnit - just lost my post. Hate retyping. In point form:- Was thinking of him, but actually thought he had some Ponzi crap on his rap sheet. Apparently not. Still, he hasn't been sentenced yet.- From the same article, the longest sentence in history for insider trading is 10 years. Hardly "decades."- I don't see why anyone stealing via insider trading should get any less of a sentence than someone stealing by other methods. The only difference is their victim is less clear. If I steal $20 from you, should I get more or less of a sentence than if I steal $20 from a corporation with a million shareholders? Link to post Share on other sites
LongLiveYorke 38 Posted November 15, 2011 Share Posted November 15, 2011 - I don't see why anyone stealing via insider trading should get any less of a sentence than someone stealing by other methods.Well, I would respond with two points. First, not every instance of insider trading is equivalent to stealing. You're still making an investment that anyone else could make at the time, it's just that you're more confident in your investment due to increased knowledge. You can use that for unfair manipulation or to gain an advantage, but, imp, the Stock Market is all about knowledge advantages anyway, so it's hard to say that a legal version of insider trading is so much morally worse than a person who culls publicly available information very well and finds trends that no one else can.Second, I was comparing insider trading to violent crimes, not simply other forms of stealing. I'm of the opinion that violent crimes should in almost every case be more harshly punished than a non-violent crime. But that's just me. Link to post Share on other sites
strategy 4 Posted November 15, 2011 Share Posted November 15, 2011 Here's a possible scenario:President of BP gets report of oil discovery from his geology team.President of BP buys BP stock.Stock goes up.President of BP get report from operations that his oil rig is leaking.Sells stock.Public learns of leak.Stock goes down.Other stockholders lose their ass.I'm quite confident that I don't want to be one of the other stockholders in this scenario. If there are no insider trading laws, I would say your average guy (e.g., myself) would be smarter to stay out of stocks. I'm not saying that would necessarily be bad, just much different.the sad truth is that the public will always get screwed in the stock market regardless of what happens with insider trading laws. the good news is that "screwed" still amounts to a nice, healthy equity risk premium. Link to post Share on other sites
hblask 1 Posted November 16, 2011 Share Posted November 16, 2011 - I don't see why anyone stealing via insider trading should get any less of a sentence than someone stealing by other methods. The only difference is their victim is less clear. If I steal $20 from you, should I get more or less of a sentence than if I steal $20 from a corporation with a million shareholders?I think the general idea is the fear portion. Getting a gun pulled on you messes up your ability to wander in public for a long time (trust me, I know). Getting robbed slowly without violence is really annoying and possibly damaging, but doesn't make you scared to leave your house.I'm not saying that is a justifiable explanation, just that it is my understanding of why white collar crime has lesser punishment (per dollar stolen, at any rate). Link to post Share on other sites
mrdannyg 274 Posted November 16, 2011 Share Posted November 16, 2011 I think the general idea is the fear portion. Getting a gun pulled on you messes up your ability to wander in public for a long time (trust me, I know). Getting robbed slowly without violence is really annoying and possibly damaging, but doesn't make you scared to leave your house.I'm not saying that is a justifiable explanation, just that it is my understanding of why white collar crime has lesser punishment (per dollar stolen, at any rate).I was assuming there is no violence involved. Like stealing a parked car. Of course if violence is involved, the punishment should be harsher. Link to post Share on other sites
hblask 1 Posted November 16, 2011 Share Posted November 16, 2011 I was assuming there is no violence involved. Like stealing a parked car. Of course if violence is involved, the punishment should be harsher.Just after I wrote my post I saw two stories, one guy lied and got something like $1500 in extra welfare checks, the other defrauded investors for a couple million. The small-time crook got something like 3X as long in jail.Presumably in cases like this the discrepancy has to do with quality of the lawyer and the fact that anyone gives a damn about the person. Link to post Share on other sites
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