Slashdot Mirror
US Busts Insider Trading Hackers
An anonymous reader sends news that U.S. authorities have dispersed an insider trading ring that broke into remote servers to grab press releases before their official publishing date. The group hacked into organizations called PRNewswire, Marketwired, and Business Wire, taking as many as 150,000 press releases over the past five years, including those involving earnings reports. The information was sold to other people who used it to buy and sell stocks. The nine people targeted in this sting netted approximately $30 million, while an SEC lawsuit targeting 32 individuals says the take was more like $100 million. Their scheme is a new type of distributed insider trading that didn't rely on leaked information from employees of any of the targeted companies. "They ran this like a business. They provided customer support: The hackers allegedly set up servers for their customers to access their information, and 'created a video tutorial on how to access and use one of the servers they used to share the Stolen Releases.' They responded to customer feedback ... Their fees were performance-based, and the performance was audited."
is a huge joke. Just close it down. It's very little about investment anyway. It's mostly about people having inside information grabbing cash from people who don't. And high frequency trading. The sad thing is that Economists don't seem to see this as a problem. Well, maybe this type of event on a much larger scale could actually do good by showing how bad things really are.
Because it's better if investing your savings and diversifying is hard?
You want a way for not-super-rich-people to buy small chunks of companies and invest. It gives them a way to get a return on their savings.
Sure, there's irresponsible trading, but I don't think you understand the purpose of the stock market.
Ownership of a business is referred to as equity. In a sole proprietorship, one person owns all the equity. But other arrangements like partnerships and corporations are common, in which many people own equity. That may be because they've all contributed to starting the business or later invested their cast to help grow the business. Selling equity can be done privately, which doesn't require a stock market. However, the best deal for the business and investors should exist when supply and demand are allowed to determine the price of equity, which occurs when stocks are publicly traded. This does require a stock market.
Economists do view high frequency trading and similar activities as somewhat risky. That said, the solution is to regulate how such trading occurs, not close down the entire stock market. I'm sorry, but that's a really foolish comment. And as for this article, there will always be criminals and con men. The activities described are already illegal, and it's good the scheme was shut down. However, even if you did away with the stock market, there will always be scams and ways to steal people's money. I'd say that the stock market is public and regulated enough so that sufficient numbers of people are watching and it's actually harder to steal money from investors than if trading equity was only done privately.
Meanwhile it's completely legal for members of Congress to inside trade
If video games influenced behavior the Pac Man generation would be eating pills and running away from their problems.