Why don't M&A analysts give all their money to close friends (since they can't trade on company clients) then give them information on M&A activities, have friends trade and profit your money based on that, and split the profit? Obviously this is illegal and unethical, but how would they get caught especially if it's not family?
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because they are friends.....also I'm sure this happens....but still if you did this on a large sale the SEC isn't THAT retarded to miss it.
haha, its funny that you think the SEC isn't capable of missing something like that....oh youth.
haha good point the SEC almost refused to catch that bernie madoff guy
hahaha i guess my age is showing
Right, but how would the SEC know they were friends and why would they spend time investigating trades for $50k accounts? I'm definitely not condoning this, but it seems way too easy for M&A analysts to use that information.
Because he can trade on his account with your info and if he screws you you won't provide him any more information
im pretty sure its not worth the risk to try because the only way to make big money off it would be to do it over and over, eventually some red flags might pop up
Cause while Tyrone is making you his bitch in the showers, you'll be asking yourself if the minimal gains you made playing mini-Ivan Boesky were worth it. I'm guessing the answer is no.
Exactly! Especially when you realize you already had a pretty sweet life and future. Even if the chances of getting caught are small, why risk it? And, even if it's a white collar prison, still, why risk it? Sitting around in the pen all day watching TV, playing cards, and reading is not nearly as sweet as waking up in your nice, clean apartment with some cute half-naked chick laying right next to you, going to dinner with friends and business partners -- having a good meal and a few drinks. You freedom is to be cherished!!!
so if your friend made big money on every deal your bank was involved in, you think they wouldn't get suspicious of your friend?
The reason you dont want to do that is because as you say at the beginning you wont get caught well your friend makes a good trade and its only 50k as you say but once you would start doing it again and again your friend no matter how much money is involved would have returns better than any other hedge fund managers / traders. Unless you make oblige him to lose money on purpose a few times to keep his return from skyrocketing maybe you would have a chance but if your friend starts having returns that are ridiculous no matter how much money involved they ll take a look at him closely. What they will see is not only he s doing great but he s never lost money and all the money he has made is a right before M&A announcements. Basically he becomes the king of merger arbitrage (I dont know if you can even call it like that because he will makes the trades even before this would be considered M&A arbitrage). Then I ll promise you it would go quickly to find out who leaks the info once they connect what M&A were involved and what M&A advisors and then what team at the advisor company and eventually they ll link you to him...
Read Den of Thieves.
Just for the record -- I am absolutely not condoning this, and I think it's unethical on top of being unethical, but just thought it was relatively easy to do this. And pm since they don't look at private returns how would they compare it to hedge funds/ traders?
your friend broker house their compliance department or op risk they ll think its weird when they review prop accounts. They will be llook this guy just opened an account he only trades pre M&A and always makes a killing so he is either a god gifted medium or he gets tipped. They not dumb they ll just notify the fed or the sec or whatever to run an investigation
I believe they would come to look at your friends account carefully because your friend account would generate trading alerst for something that is called trading ahead of market events I believe
Is this moron living under a rock? Go and ask SAC Capital and their 'expert network' how that works out. And these guys are 10000x more sophisticated investors than some analysts and his college buddies.
Tell Bernard M. I say hello.
I wouldn't risk my whole career and reputation for a few quick bucks. Beside, if you ever do it, don't ever tell a living soul.
^ yes. You may get away with it a few times, but they will eventually catch on. If you're trying to make a quick buck, it's not worth it.
theres no free lunch
ur banned from finance for life, take a series 79/63. not worth 1k in profit and u'll prob get caught 25% of the time u do it or some other crap happens like people blackmailing u and turning u in to not get caught themselves.
For every major acquisition of a public company, FINRA does a check on suspicious pre-announcement trading activity. Everybody on the deal team will be sent a list of names and you will need to sign a document saying that you don't know the people on the list.
When some investigator realizes that a number of people on that list were in the same college class as the M&A analyst on the deal, then suddenly you'll wish you hadn't done something so incredibly stupid to see a 25% return on your puny investment.
It's called a hedge fund
Funny, SB.
What if you were toward the end of your career (so you could retire out of the reach of the US government) and could do one or two huge trades that would net you a few million a pop? You would/could essentially flee the country after the second one and then split the money with your buddy (or buddies to be less suspicious) get the money to a non-Swiss, offshore bank account and then transfer it from there to where ever you plan on living or can get access to it.
I don't fancy myself a criminal and would likely never try anything of the sort because I seriously value my freedom, but I've seen shows where someone was gonig to pull a big heist and retire to Mexico with the $50k he got from the bank. The only way I could see myself attempting something of this nature was if it was life changing tens of millions of dollars...not an amount equal to the bonus of a mid-bucket 1st year IB analyst, lol.
Given the parameters I mentioned would anyone risk it? Also, where would you flee too?
Regards
Thank you Wikipedia:
The United States maintains diplomatic relations, but does not have extradition treaties with the following countries: Afghanistan, Algeria, Andorra, Angola, Armenia, Bahrain, Bangladesh, Bosnia and Herzegovina, Brunei, Burkina Faso, Burma, Burundi, Cambodia, Cameroon, Cape Verde, the Central African Republic, Chad, China (People's Republic of China), the Union of the Comoros, Democratic Republic of the Congo, Côte d'Ivoire, Djibouti, Equatorial Guinea, Ethiopia, Gabon, Guinea, Guinea-Bissau, Indonesia, Kosovo, Kuwait, Laos, Lebanon, Libya, Madagascar, the Maldives, Mali, the Marshall Islands, Mauritania, the Federated States of Micronesia, Moldova, Mongolia, Montenegro, Mozambique, Namibia, Nepal, Niger, Oman, Qatar, the Russian Federation, Rwanda, Samoa, São Tomé & Príncipe, Saudi Arabia, Senegal, Serbia, Somalia, Sudan, Syria, Taiwan, Togo, Tunisia, Uganda, United Arab Emirates, Vanuatu, Vietnam, Yemen, and Zimbabwe.
There are some decent countries there. the Russian Federation, Saudi Arabia, Brunei... the Emirates...
No one kept up with Galleon case?
Indonesia shouldn't be overlooked if you don't mind going to the Australian hospital in Bali if you need care.
Insider trading is very very common. I dont know of any analyst that engages in that shit but thats because they dear not tell anyone.
I have a friend ( not so close) who is the son of an executive of a huge corp in Europe and makes a killing on acquisiton plans. There are so many ways you can go around it w/out anyone suspecting eg doing so through a friend of a friend of a friend and there many other ways to profit off a merger besides longing right before the announcement. In his words "EVERYONE DOES IT" "THATS HOW ITS DONE"
call me a pussy or whatever, but waay too risky for me, I love my freedom
You could conceiveably have someone on the HK or some European exchange making trades. I'm not sure that any rules here would be enforceable.
You could conceiveably have someone on the HK or some European exchange making trades. I'm not sure that any rules here would be enforceable.
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