$500k Insider Trading Scheme Brings Down Two Car Wash Business Owners, Court Records Show

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$500k Insider Trading Scheme Brings Down Two Car Wash Business Owners, Court Records Show (NWITimes.com)
HAMMOND — Faced with a struggling car wash business and mounting debt, two Lake County brothers used an insider trading tip from a close friend in California to reap $500,000 in illegal profits, newly filed court records show. Douglas Miller and Edward Miller, co-owners of Hands On Premium Car Wash in St. John, went to great lengths to conceal the conspiracy. They structured wire transactions in such a way to stay under the radar and used prepaid cellphones to communicate before disposing of them, according to federal prosecutors.
 
Would it have been insider trading if he just overheard 2 people talking in a coffee shop and decided to take action on that? Not knowing who they were?

(boards flight to silicon Valley to sit in coffee shops all day )
 
El_Cubano said:
Would it have been insider trading if he just overheard 2 people talking in a coffee shop and decided to take action on that? Not knowing who they were?

(boards flight to silicon Valley to sit in coffee shops all day )
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Interesting question. It would be insider trading but in good faith. I do not believe the law adresseses that situation specifically, so it would be up to a judge to lay out the case law.

Any law professional care to pitch in?
 
Trying to figure out how they got found out. I see the price was around $107 and after the announcement jumped to $126 which means they probably bought 250 options for around $2. 250 options doesn't really seem like a lot to make a red flag happen.

I'm guessing someone tipped off the SEC. I can't believe they have the manpower to check every time a couple hundred options are purchased on a stock that happens to move 10-20%, but I could be wrong.
 
peilthetraveler said:
Trying to figure out how they got found out...
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Loose lips sink ships. The more people involved in a scheme the more likely there will be someone in the circle who simply cannot keep their yap shut.

Social media has been proving that for a long time. People just can't stop talking about themselves.
 
peilthetraveler said:
Trying to figure out how they got found out. I see the price was around $107 and after the announcement jumped to $126 which means they probably bought 250 options for around $2. 250 options doesn't really seem like a lot to make a red flag happen.

I'm guessing someone tipped off the SEC. I can't believe they have the manpower to check every time a couple hundred options are purchased on a stock that happens to move 10-20%, but I could be wrong.
More...

I got called from the SEC after buying a 1000 calls on a drug company and that afternoon the drug company released some information on a clinical trial. I think it’s done electronically and randomly.
 
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