What’s stopping me from insider trading?
Hey WSO fam,
Recently my stock portfolio took a hit. Then an Instagram reel gave me a moment of epiphany - Nancy Pelosi is always winning!
Just copy her moves and voila, instant free ride.
Copying Pelosi isn’t even considered insider trading, which means you aren’t legally liable!
Found the ultimate cheat code.
You have to trade material non-public information to be found guilty of insider trading.
It's the same reason why you wouldn't simply copy every single trade Buffett or Klarman do. Would you?
What's stopping you? The SEC and a few years upstate (and I don't mean on a farm.) I know a guy, he had to pay it all back and got 2 years.
Pretty sure you have to pay 3x your gain on transactions. Then the jail time.
big vinny who lives up in sing sing loves green eared finance grads
that should be reason enough NOT to do anything stupid
DoJ, SEC and FINRA (in order of cheek clapping intensity)
I hate this trade IG social media posts, she's a top 10 performer but not close to a top 5, let alone volume wise top 10. If you go to the websites, I find it crazier the unknown senators and Reps that have like >4K trades or like Brian Higgins from NY up 238% and Mark Green up 122%. Haha and no I don't have political bias, almost any list you google it's 1-2 Rep and Dem, switching back and forth.
But in legality you can follow someone else's trades and then just save a article or platform showing your performance and you won't get in trouble. I'm pretty sure they are creating a ETF that follows The top 10 performers of Congress.
It doesn't even bother me that much. I mean, it does, but is the system any more rigged in their favor than it is for any large fund at the expense of retail investors? Isn't the whole point of keeping retail investors in the market is because they're basically easy marks?
The only time the "insider trading" stuff gets me is when it's really egregious. There were like a dozen Reps and Senators who made a lot of money in January/February 2020 trading on the knowledge of COVID before it was made clear that this was coming to the US and was going to kill a lot of people. That's pretty fucked up. My guess is most of the rest of the insider stuff could be fairly well replicated if anyone bothered to read the minutes of any given Congressional meeting, but that one seemed like prioritizing making a buck over public health
I thought the lax disclosure laws made mirroring their entries and exits next to impossible (by design).
THIS. Congressional insider trading is exactly that - just for congress
Loopholes surrounding disclosure regulations mean that you have already missed your boat by the time the information gets publicized. Eg Max Bacchus got info from the SEC chair and shorted the stock market in 2008, but the trade was only disclosed after the market had crashed.
PS don't want to get too conspiracy-theory here but I think the Congress leave the loopholes unfixed on purpose. Our system is fucked.
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