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Former Dell Execs Involved In Massive Insider Trading Probe
DMandPenfold writes "Two former Dell employees, including a former investor relations manager, were part of a $62 million record-breaking insider trading scam, involving the company's shares as well as Nvidia stock, according to the FBI. The news comes as the U.S. authorities step up their pursuit of inside traders. Two months ago, Galleon hedge fund founder Raj Rajaratnam was sentenced to 11 years in jail for his role in a scam involving AMD, IBM and 3Com stock. Yesterday, Sandeep Goyal, an employee at Dell's U.S. headquarters between 2006 and 2007 before becoming a financial analyst, was arrested. An unnamed co-conspirator in Dell's investor relations department from 2007 to 2009 is also alleged to have been part of the scam. ... Goyal allegedly made $175,000 by providing inside information about Dell to a hedge fund. He has pleaded guilty to charges of securities fraud."
and yet... John Corzine is still walking the streets.
They might be able to start softball team of convicted inside traders at Fed Med by the end of the decade. its something everyone knows is happening, but almost no one gets caught.
I would be curious to hear the libertarian viewpoint on whether insider trading should be a crime?
A truly free market would solve it!
How?
I SAID A TRULY FREE MARKET WOULD SOLVE IT!
Insider trading is hugely common in the corporate world to the point that there is an entire industry surrounding it (Wall Street). Any prosecutions for "insider trading" are totally political. They either upset someone in power, upset a competitor with powerful friends, or didn't do something they were asked to do.
See Quest's CEO as an example. He refused to allow the NSA to spy on Quest's customers and suddenly he is in jail for "insider trading." Opps.
Folks...
You can't refer to the regular posters as "folks", post AC, whip out a scare tactic, and support censorship all in the same breath.
(Actually you CAN, but expect it to be pointed out.)
It's nice to see some action on insider trading scams and valuation fraud, but how about nailing the big fish instead of tossing us minnows and thinking we'll be satisfied. I want to see the sharks hanging on a hook: the Wall Street traders and bankers who've cost the US and global economy literal BILLIONS.
I do not fail; I succeed at finding out what does not work.
Rich peoples crime. Nothing will happen to them.
Probation, suspended sentence.
if it's good enough for congress....
Yesterday Google announced earnings. At 4:01pm EST, exactly. I was able to get the page at 4:01:05pm EST, and just as a joke at the exact same time I checked out after hours trading on GOOG. It was already down 8%, though 5 minutes earlier it was holding around even on close. Tell me, how anyone was able to parse that document in 4 seconds, place the trade, and have it go through after hours.
The system is already so corrupt and broken that anybody who isn't on the "in" shouldn't ever try to invest except for extreme long term. I don't know why a case like this would surprise anyone.
Everything about Dell is a scam these days!
Dude, you're getting a cell?
Man blir trött av att gå och göra ingenting.
That's been going on since Dell went public.
OK, lemme get this straight... At Megaupload.com, some people do something illegal on the site, and the entire company is shut down, kaput, without even a trial.
Now here's a story about insider trading, which I assume is also something illegal... Why isn't the company they worked for ALSO shut down?
It seems to me that we have two standards of 'justice' in this country. And if you're a rich white guy, that system is a lot more lenient.
If telephones are outlawed, then only outlaws will have telephones.
Contrary to the labeling of this as a "scam" worthy of more years in prison than many murderers gets, insider trading is actually a good thing for the market. Information about the quality of a company helps provide the market with knowledge and certainty about future prospects. A company may not want to have negative information released too soon, however if market insiders are able to sell their stock ASAP, they signal to the market that there are problems with the company, allowing the market to respond and adjust accordingly. By banning insider trading (except, of course, among politicians), the government is not only propping up failing organizations, but also hindering successful ones, and adding uncertainty to the market.
Annoucement of lower earning, let's say and it triggers selling - regardless of what's really behind the numbers. Then when the "street" digests the numbers, things move to where they should be.
Just happened today with GE. GE said they had lower earnings and lower revenues - GE stock got killed in early trading. Then folks got the whole picture and the stock has since rebounded - I'll spare you the details.
But by all means, I'm sure there might have been "hints" during a golf game, at the gentlemen's club, that things are going to be a bit better than predicted.
Not in the least here. The markets are obviously being manipulated.
I prefer the "u" in honour as it seems to be missing these days.
A lot of Indian names in the news post
There is nothing inherently wrong or immoral about a company insider acting on inside information -- and there certainly isn't any presence of coercion (which there certainly is when it is criminalized). Human nature didn't criminalize insider trading; the people who control government criminalized it (note that's NOT you and me). Realize that we're not talking about organized manipulation of stock prices or executive-level scams. We're talking about a CEO's friend buying shares because he was tipped off about the big surprise coming up. But these actions don't occur in a vacuum. They contribute to the pricing of the stock, and traders will notice. They will act on the information, and others will notice. What happens today is a mass panic where the majority loses, and a small minority profit. Insider trading would help to buffer the chain of events.
In a free market, insider trading would amount to nothing more (or less) than clues to non-insiders of an upcoming directional change. And that's how it should be.
With that said, the true reason insider trading is criminalized is the same as nearly all of the other (thousands of) expansions of government over the past century: to increase the scope of their powers, justify revenue, and generally make the business of government -- notice I said "business" -- bigger and more lucrative for those who engage in REAL insider trading.
Follow the logic
I own company X (shareholder)
I hire a agent in a posistion of trust (a C.E.O., for example)
The manager takes / gives away valuable property (i.e. insider information)
At a disadvantage (i.e. lacking insider information) I trade at a disadvantage. (I sell stock too low, I fail to invest, etc.)
Wealth is transferred from me to the insider.
It’s a breach of fiduciary reasonability. Liberations believe in playing hardball, but cheating is another thing.
... now there's a surprise...
After all, India is such a wonderful place, just look at this:
http://www.chinasmack.com/2010/pictures/filthy-india-photos-chinese-netizen-reactions.html
Don't tell me, "racist" "racist" "racist"... Yep, that should make it all magically go away.
Get bonuses and a bailout from government. Too big to prosecute?
I think you go too far when you go into China territory.
I think it would be more fair to compare it to the Gilded Age of Robber Barons. Insiders who tilted the rules of the market in their own favor. Jay Gould and Daniel Drew would be good examples. These people gained control of corporations and tilted it towards their own gain vs. the shareholders. Took control of banks and choked off competition. Etc.
I always find it odd that an industry which experiences the least amount of government regulations (tech and Silicon Valley), and flourishes as a result, is so adamant about regulating industry.
To see insider trading going on at a respectable company like Dell of all places. I mean, look at the quality of their products and their stellar technical support (cough, cough).
Excuse me, I must mop up that sarcasm that's been dripping on the floor.
Please do not read this sig. Thank you.
You can have an un-regulated market which does not exhibit Free Market behavior, e.g. monopolies. And you can have a regulated market which comes *much* closer to a Free Market.
Example. The NYSE has at least 3 layers or regulation. The rules of the NYSE is the first layer, and require such things as publicly signalling buy and sell prices which allows efficient , fair, and fast pricing. The the State of NY and and the SEC regulate the market to prevent fraud.
Libertarianism will destroy Free Markets, IMO.
putting the 'B' in LGBTQ+
Real insider trading is done in government, before it releases a law or decision upon a company's future (like knowing whether FDA will deny or allow a new drug to the market), and Senators / Congressmen being bribed in stock options where straight up cash would be considered an illegal bribe, because they voted themselves this little neat trick.
Insider trading idea is a bunch of crap. The only problem is FRAUD, all other trading that is done privately is done based on some form of information.
For a top manager to bet against his company and then tank the stock by doing something that would undermine the company's value is FRAUD.
For a top manager to bet against his company because he THINKS that the company is going in the wrong direction - that's not fraud, that's common sense.
For a government official to accept a bribe in form of a stock option or to short stock of a company before passing a LAW that would hurt that company financially - that is REAL insider trading fraud.
You can't handle the truth.
Most companies don't allow shorting or hedging company stock, at least to higher level employees. Some don't allow it for anyone. This creates conflict of interest.
"piss boy! oh, piss boy!"
- mel brooks
Comment removed based on user account deletion
"Dude, you're getting a cell." Just brilliant...who thinks of the slashdot article headers?