MIT research scientist pleads guilty to insider trading

[lawrence-lugar]

Gordon Gekko said it best,

'You don't need inside information anymore to get rich...you just need to stay out of jail.'
(loosely paraphrased) from Wall Street Money Never Sleeps, 2010 movie.

If you're a smart or wise trader...you can make much more than that what he made.
What a foolish man to take that risk with inside information. he and his wife were already basically rich.

 

[carrer]

Creating a new account a few days prior to a large option purchase will definitely raise a red flag. On the other hand, a trader that regularly trades with consistent sizes, upon receiving an insider information, he should trade with the size similar to his 'usual' sizes.

How do we get around this? Maybe one should find a large trader friend and let him trade using your information and get commissions.

 

[Equalizer]

Even smart people do really stupid things.
...
Authorities said the insider information came from Yan’s wife, an associate at a corporate law firm.
...

Bingo! It is well known in the financial industry that corporate lawyers tend to be the biggest "leakers" in insider trading.

 

[newwurldmn]

How do they bust a guy like that without a snitch? Seems like not that big a volume? Also, way to ruin his wife's career too.

Unless big brother's just monitoring internet traffic, looking for keywords, and back tracking IPs.... Which doesn't sound all that legal.

I once had a volume based strategy that signaled for me to buy OSIP (a pharma company) calls. I bought 1200 at 330pm. That evening "unexpected" drug news came out and the stock rallied 3 dollars. I made 300k. Two days after that I got a letter from the SEC asking why i did the trade.

 

[carrer]

I once had a volume based strategy that signaled for me to buy OSIP (a pharma company) calls. I bought 1200 at 330pm. That evening "unexpected" drug news came out and the stock rallied 3 dollars. I made 300k. Two days after that I got a letter from the SEC asking why i did the trade.

How did you respond to them? After you have responded, any further inquiries from them?

 

[jl1575]

I once had a volume based strategy that signaled for me to buy OSIP (a pharma company) calls. I bought 1200 at 330pm. That evening "unexpected" drug news came out and the stock rallied 3 dollars. I made 300k. Two days after that I got a letter from the SEC asking why i did the trade.

That is cool!
Did you showed them the chart?
I think that is called indirect insider information, the insider info led to the increased volume, and you acted on that, smart and legal. Hope you don't have family members, friends or relatives associated with OSIP though, otherwise they will scrutinize it extensively even you acted on it without any insider info.

 

[newwurldmn]

How did you respond to them? After you have responded, any further inquiries from them?

I was working for a bank and a compliance lawyer called me. She said they get these inquiries all the time. I explained the strategy and showed her the model. She wrote a letter explaining and the case was closed.

 

[zdreg]

. Which doesn't sound all that legal.

be serious. when does legalities stop the government from pursuing the little guy.

 

[sss12]

Creating a new account a few days prior to a large option purchase will definitely raise a red flag. On the other hand, a trader that regularly trades with consistent sizes, upon receiving an insider information, he should trade with the size similar to his 'usual' sizes.

How do we get around this? Maybe one should find a large trader friend and let him trade using your information and get commissions.

@carrer LOL...Besides the moral issues here..for your sake I hope you never come across such info, you will surely end up in jail !

 

[pursuit]

I once had a volume based strategy that signaled for me to buy OSIP (a pharma company) calls. I bought 1200 at 330pm. That evening "unexpected" drug news came out and the stock rallied 3 dollars. I made 300k. Two days after that I got a letter from the SEC asking why i did the trade.

What would happen if you told SEC to go fuck themselves? Trading strats are proprietary.