Insider trading or plain old deductive reasoning?
I want to be surprised. Astonish me, pal, new info, don't care where or how you get it, just get it.I'm going to make you rich, Bud Fox, rich enough you can afford a girl like Darien. This is your wake up call, pal. Go to work.
Oliver Stone may have intended for Gordon Gekko to be the devil incarnate, but one thing that always surprised me is why he actually ended up in jail. Nowhere in the movie did he tell Bud to do any of the unscrupulous things that he did. Surprise me doesn’t translate to steal info on mergers by impersonating a janitor, and as far as I’m concerned, following a guy around and deducing that he’ll buy Annacott Steel isn’t privileged information at all.
Unfortunately, this seems to be the case with the SEC’s newest target as well.
The SEC is now suing fund manager Toby Scammell for insider trading after his Marvel call options netted him over 190 grand when it was taken over by Disney, citing that he got inside information from his girlfriend who was an extern for Disney at the time. The SEC alleges that he had access to his girl’s blackberry as well as literature on the deal, helping him figure out that Disney was in the midst of a major acquisition, and that she unknowingly divulged when it would happen when she said that the project will be done in time for them to attend a wedding.
Thing is though, it was pretty much an open secret back then that Disney was out to takeover Marvel, it was just a matter of when and for how much. Seeing that he figured out the when part in a totally unrelated conversation doesn’t qualify as material information if you ask me, and guessing that the price would be between $45-$50 seems pretty logical for a company that traded at $41 at its peak as well - a bit low even.
What about you monkeys? Do you think this guy traded on insider info? Or did he just make a couple good guesses?
Scary things happen when you take away the SEC's porn man...
don't care what really happened, it's what'll happen in the end that matters. Curious how this will turn out.
If you use information about a company that isn't public, to your financial advantage (regardless if it was in an "unrelated" conversation), then you're breaking the law.
How complicated is that?
I can already hear the delisting... One more step to inhibit business/trading. I know this sounds ridiculous but all I can think about is V for Vendetta! People should not feel scared of their government! If this was a private regulatory agency that would be another story.
I wouldn't necessarily call it "guesses" but if someone drops legally obtained information accidentally on your doorstep... what are you supposed to do? Who is to say he wouldn't have traded then anyway? Basically the SEC is FORCING people to lose money if they become privy to information that the SEC will somehow contrue to be "insider."
I'm very interested to see how this will turn out as well. Pretty soon they will require all traders to wear blinders and earplugs 24/7 and only trade on SEC filing information that has been released for at least 24 hours prior to the trade.
That is exactly what the SEC is intended to do. If you are presented material non-public information you are not allowed to act or cause others to act on that information until it has been publically disseminated. The SEC is not FORCING people to lose money. They are attempting to prevent individuals from acting on material non-public information. Is the SEC effective at preventing people from trading on inside information? Absolutley not, but the fact that the information was obtained legally has nothing to do with whether or not it is is considered non-public "inside" information.
It doesn't matter what Gekko told anyone to do: he was getting inside information and thus breaking the law. If someone's going to do something shady/illedal/under the table, then keep it under the table and avoid bullshitting themselves. Aside from just following the law, the best thing they could do is knowingly enter into the situation realizing full well that discretion is key and that it doesn't matter what version they tell themselves if they get busted.
As for the SEC, they're just looking to justify the existence of their sorry carcassas.
Funny thing is this happens everyday and the SEC doesn't bat an eye. They are worthless. It took them 20 years to catch Bernie, I don't think they are very good at catching the nimblest of insiders. I'll tell you one thing.. if I was privy to insider information that happened to be 'dropped' on my desk, I wouldn't hesitate to trade on it.
What grade did you get in securities law?
Why does the SEC give a shit about $190,000?
Are they going bankrupt?
i always wanted to work for the sec :(
@blastoise
i was thinking the same thing. My friend is a secretary at a church and she makes more than that.
Ah, that's my favorite scene in the entire movie, is the phone call from the beach.
As far as Scammell, he probably just got very lucky.
Yeah I mean, whatever the story was here, it's a pretty stupid trade. I mean, you trade on a company being acquired by your girlfriend's employer? That's fucking retarded.
For those of you interested, Scammell created a web site: http://secfail.com/.
Whatever happened to innocent until proven guilty? According to Scammell, his theory came about from researching public information as part of consulting work he did for Disney. As MMM pointed out, it was no grand secret that Disney had looked at Marvel previously. From what I've read, the SEC has no hard evidence. Just because you know someone with inside information doesn't make you an insider. He'll never be able to prove a negative, but he shouldn't have to. Until the SEC has proof that he accessed this information or has a witness, rather than the "there's no way he's that lucky/good" theory, I'm going to believe he should be let go.
@NYCbandar It's "fucking retarded" to do something legal because it might look illegal to an incompetent government regulator? You said "whatever the story," so you're allowing for the possibility that he is completely innocent. People shouldn't have to refrain from acting legally because they are worried about unjust prosecution.
Dude this is finance not a fucking civics class. This is the real world, shit's complicated on all sides and not everything turns out the way god and Thomas Jefferson intended it.
Think about it like this, If I'm looking at financing a gas exploration project in Venezuela, what's the first thing I think about? Political risk. It might be a great deal on paper, but that doesn't help me much if my shit gets nationalized. That's a risk you need to consider going into it. Is it fair? Maybe, maybe not, but "fairness" isn't relevant when it comes to the government, that's just how it is.
If you make a trade like this, where frankly you should know that it's going to look suspicious, you make the trade knowing that there is the possibility of an SEC investigation. It's a risk you take. That's what makes the trade retarded, the fact that he didn't consider all potential risks. Not all risk is market risk. Whatever you think the world "should" look like, we play our little games in the one we live in.
So, yeah, sometimes it is retarded to do something that's perfectly legal because there is the potential an inept government agency will screw with you.
If casey anthony can get off, I am sure this guy can.
casey anthony wasn't even guilty
the states case was so fkin weak
i just threw poop at you
I just shit in my hand and threw it in your mouth
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