I have a reliable friend (i'll leave it at that) whose significant other (i'll leave it at that) is on the BP deep water board. That friend told me in 2009 that BP had made a huge find in the gulf of Mexico, and that the information was "confidential". I did not act on the information (thank god!) and respected its confidential nature. Nevertheless, that's how it happens every day. Had I acted on that information, and had things turned out differently, there would have been no way to trace the information back to its source. That's how it happens every day of the year. There is no way to enforce inside trading on that kind of second hand information. And no way to catch those not directly connected as long as there is not a blatantly obvious trail to follow. It happens all the time. Just something we have to live with.
How to do Insider Trading without getting caught?
- Thread starter jagadish
- Start date
Unlike in USA, there is no death tax ( http://to./4jj5 ) in India.
Hence people are corrupt and sacrificing their integrity to accumulate wealth for their next generations.
Dear Piezone , you've described it very well , I can remember when I was a 10 year old kid , I met met a guy on the London train who was some sort of consultant for a canadian mining comnpany and he told me to buy the shares saying they had found some big reserves , and they duly doubled over the next few months , I daresay many people have similer stories .
Yes, I think having employment that gives one access to information would work for finding the right trades. But as for getting caught, the SEC can subpoena your trading records if anyone complains about you--they don't need any very convincing reasons. I would think it would be possible to trace back who traded what somehow. Impossible to be sure of not getting caught.
I could have made a killing by now based on what I have access to at work. But, I would never consider trying it. Very risky, very bad idea, that is not worth what can happen to you. It's only money. Freedom is more important.
I could have made a killing by now based on what I have access to at work. But, I would never consider trying it. Very risky, very bad idea, that is not worth what can happen to you. It's only money. Freedom is more important.
Its actually a lot more common than what you think...
http://msn.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10651209
Insider trading suspicions in third of all UK takeovers
View as one page 2:30 PM Friday Jun 11, 2010
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London's Canary Wharf financial district. The UK financial regulator says abnormal share price movements were seen before one third of all takeover announcements. Photo / AP Shrink London's Canary Wharf financial district. The UK financial regulator says abnormal share price movements were seen before one third of all takeover announcements. Photo / AP
Almost a third of the takeovers on the London Stock Exchange last year were preceded by suspicious share price movements, suggesting insider dealing or other market abuse may have been taking place, the UK financial regulator said this week.
The Financial Services Authority (FSA) said analysis of the 144 takeover announcements made to the Stock Exchange last year had uncovered "abnormal pre-announcement price movements" in 30.6 per cent of cases. That was the highest figure since 2004.
While the figures do not prove that financial crime has increased, the regulator said the figures were worrying. Its annual report, in which the data was revealed, said: "They could show that the market abuse is too high and [we] are strongly committed to considering if there are actions that we could take to reduce them."
The data is likely to embarrass Hector Sants, the chief executive of the regulator, who has insisted that the FSA has become a much tougher watchdog since the financial crisis three years ago, when it was accused of having been asleep at the wheel.
Yesterday, Sants pointed out that the regulator had hired 537 new members of staff for its supervisory departments since April 2008 and claimed "improvements in our market abuse and insider-dealing detection and investigation capability".
However, while there have been a string of high-profile dawn raids relating to insider-dealing investigations in recent months, the FSA has secured only two criminal convictions over the past year, with a third trial producing not guilty verdicts on all the defendants.
Though criminal proceedings have been launched in four other cases - and other investigations may yet bear fruit - the FSA has faced criticism for its failure to bring more financial criminals to justice.
Since coming to power, the UK Government has said it will create a single agency with responsibility for tackling all white-collar crime, amalgamating the powers of the FSA, the Serious Fraud Office and the Office of Fair Trading.
Steve Nash, head of the takeovers team at Eversheds, the City law firm, said the FSA's focus on financial crime was having some effect, but that there was more work needed.
"Insider dealing may not be quite as prevalent as the statistics suggest because there are all sorts of reasons for suspicious share price movements," said Nash. "But one would expect these statistics to be falling if incidents of insider dealing were coming down." In fact, the proportion of deals preceded by odd share price movements has risen in each of the past four years
To the guy who said they can trace you through your trading records , doesn't he have family and friends , I suspect in a lot of cases money doesn't even change hands , just favours.Good article , and if you consider insider dealing is probably spread between a number of people/accounts the chances of getting caught are indeed probably less than 1%.
I was exposed to the same thing in telecom. Reps from handset manufacturers would sometimes drop big hints on quarterly performance. Grinning from ear-to-ear if you know what i'm saying...