7 ms·

If simply being husband of a woman who works for Amazon can help you acquire such information on which you can perform insider trading. What stops from former

If simply being husband of a woman who works for Amazon can help you acquire such information on which you can perform insider trading. What stops from former workers at intelligence agencies from starting a hedge fund and employing all methods they learned while at work, to acquire such valuable information, trade based on that and offer others money management services?

ForHackernews 5y ago
There are laws against corporate espionage. In terms of legal intelligence gathering, hedge funds already do that: https://newsroom.haas.berkeley.edu/how-hedge-funds-use-satellite-images-to-beat-wall-street-and-main-street/ https://newsroom.haas.berkeley.edu/how-hedge-funds-use-satel...
staplers 5y ago
I'd guess the same thing that stops Senators from trading on inside knowledge of global issues.. nothing
sfifs 5y ago
> What stops from former workers at intelligence agencies from starting a hedge fund and employing all methods they learned while at work, to acquire such valuable information, trade based on that and offer others money management services? That wouldn't be insider trading. Indeed hedge funds are known to use intelligence data like satellite photos etc. If they use illegal monitoring devices, hacking for info etc, they may fall afoul of federal espionage, wiretapping or CFFA, but it would still not be insider trading.
- rich_sasha 5y ago
  > if they use illegal monitoring devices, hacking for info etc, they may fall afoul of federal espionage, wiretapping or CFFA, but it would still not be insider trading. Thats an interesting point, if I hack the CEO’s phone and get the earnings number a day ahead, then trade off them, I kind of wonder how that isnt insider information. Although laws around that are so odd, especially in US, that it wouldn’t surprise me.
  - btown 5y ago
    The SEC has historically treated hacked earnings reports as material non-public information, so the post you're replying to is incorrect: https://www.lexology.com/library/detail.aspx?g=fd5d5ca7-20c5-4ed8-b2ce-74d6dd62ab46 https://www.lexology.com/library/detail.aspx?g=fd5d5ca7-20c5... (not a lawyer, not legal advice)
- gpderetta 5y ago
  > If they use illegal monitoring devices, hacking for info etc, they may fall afoul of federal espionage, wiretapping or CFFA, but it would still not be insider trading. that would still be trading on material non public information which is prohibited.
  - sokoloff 5y ago
    I would hope that original/primary research would not result in insider trading charges. (If I have no other connection to a company and count cars in a retailer parking lot, foot traffic, or trucks leaving a warehouse and trade based on that information, I would expect and hope that those trades would be legal, even if the findings that I self-generated were material (and of course non-public).)
    - gpderetta 5y ago
      if the research is done with public information, of course there is no issue. If you go, for example, dumpster diving on shredded company documents then it might be an issue. Note also that there are difference between US and EU. I think US might require a breach of duty of care somwhere in the chain of responsibilities for insider trading, while EU doesn't.
vmception 5y ago
Usually just the lack of startup capital and lack of pedigree to get wealthy enough investors There isn’t an inherent legal issue here Insider trading also requires you or the person you got information from to have a fiduciary or contractual duty not to share information That typically ends after employment or when the NDA expires There is nothing illegal about having an advantage in the market, if thats the assumption where you are starting from

ForHackernews 5y ago

There are laws against corporate espionage. In terms of legal intelligence gathering, hedge funds already do that: https://newsroom.haas.berkeley.edu/how-hedge-funds-use-satellite-images-to-beat-wall-street-and-main-street/ https://newsroom.haas.berkeley.edu/how-hedge-funds-use-satel...

staplers 5y ago

I'd guess the same thing that stops Senators from trading on inside knowledge of global issues.. nothing

sfifs 5y ago

> What stops from former workers at intelligence agencies from starting a hedge fund and employing all methods they learned while at work, to acquire such valuable information, trade based on that and offer others money management services? That wouldn't be insider trading. Indeed hedge funds are known to use intelligence data like satellite photos etc. If they use illegal monitoring devices, hacking for info etc, they may fall afoul of federal espionage, wiretapping or CFFA, but it would still not be insider trading.

rich_sasha 5y ago
> if they use illegal monitoring devices, hacking for info etc, they may fall afoul of federal espionage, wiretapping or CFFA, but it would still not be insider trading. Thats an interesting point, if I hack the CEO’s phone and get the earnings number a day ahead, then trade off them, I kind of wonder how that isnt insider information. Although laws around that are so odd, especially in US, that it wouldn’t surprise me.
- btown 5y ago
  The SEC has historically treated hacked earnings reports as material non-public information, so the post you're replying to is incorrect: https://www.lexology.com/library/detail.aspx?g=fd5d5ca7-20c5-4ed8-b2ce-74d6dd62ab46 https://www.lexology.com/library/detail.aspx?g=fd5d5ca7-20c5... (not a lawyer, not legal advice)
gpderetta 5y ago
> If they use illegal monitoring devices, hacking for info etc, they may fall afoul of federal espionage, wiretapping or CFFA, but it would still not be insider trading. that would still be trading on material non public information which is prohibited.
- sokoloff 5y ago
  I would hope that original/primary research would not result in insider trading charges. (If I have no other connection to a company and count cars in a retailer parking lot, foot traffic, or trucks leaving a warehouse and trade based on that information, I would expect and hope that those trades would be legal, even if the findings that I self-generated were material (and of course non-public).)
  - gpderetta 5y ago
    if the research is done with public information, of course there is no issue. If you go, for example, dumpster diving on shredded company documents then it might be an issue. Note also that there are difference between US and EU. I think US might require a breach of duty of care somwhere in the chain of responsibilities for insider trading, while EU doesn't.

vmception 5y ago

Usually just the lack of startup capital and lack of pedigree to get wealthy enough investors There isn’t an inherent legal issue here Insider trading also requires you or the person you got information from to have a fiduciary or contractual duty not to share information That typically ends after employment or when the NDA expires There is nothing illegal about having an advantage in the market, if thats the assumption where you are starting from