What can I do about insider trading activity in stock options that cause financial harm?

[joezapp]

Most folks were well intentioned and that to me is more important than being polite but really said nothing.

Funny you said that, because I was thinking the same thing. 8 pages of discussion about that trade, but one line referencing my actual question...the first line. But the people on this site are informed and experienced, and the dialogue is typically professional. That's why I love this site.

 

[ironchef]

Now, I'm a stock INVESTOR. I take my option premiums and dividends and I invest them in stocks that I've researched well. I also look for the "fat pitch". There was a fat pitch on January 20, and again on February 11. Were you buying?

The expert technician that called the August correction exact said there will be another "fat pitch" in October. Keep your powder dry, raise some cash, and start making your list.

Thank you for your coaching.

I did not buy Jan or Feb this year because I did not have any investable funds left after last October .

You have given me some very good advice. I agree and am going to start unloading some to raise some cash just in case there is another buying opportunity coming up .

Regards,

 

[joezapp]

1. The company released the news after market close.
2. The decline in price of the stock did not start until after the release.

From this I would conclude there was no significant insider trading on the stock prior to the news release.

It would not be unusual for there to be a spike in put buying just before earnings release... especially if some people suspected it might not be good on the basis of public information... just as there might be a surge in call buying if some people thought the news would be good.

But I think it IS unusual to see a volume spike so far before earnings in front of a bad news announcement.

It would take a subpoena to see who it was that was buying the puts and you can always file a complaint to the SEC. If the SEC sees unusual activity in those puts it could decide to get such a subpoena.

You have no way of knowing without an investigation and subpoenaed information.

It costs nothing but time to complain and seek an investigation.

If I were in your position... I would do it. Someone who knew the news was coming and bought those puts from you BEFORE THE NEWS WAS PUBLIC committed a crime as surely as if they held you up on the street with a Saturday night special.

Not for a single trader. But the SEC does like it when there is a trail of bread crumbs they can follow. And that typically starts with someone bothering to file a report.

For both of you, as well as anyone else who may be interested, here is what I found so far, as I managed to speak to SEC counsel regarding the procedures and process for remedy.

SEC handles the crime only. SEC reviews the complaint and can decide to bring litigation and subpoena. It then becomes public information. SEC would contact the complainant as part of the investigation. If it doesn't become public, the complainant would get no follow-up. Counsel assured me that all complaints get reviewed.

SEC counsel recommends better avenues to deal with the complaint at the individual level...FINRA and/or bringing litigation. Note that FINRA has recently taken over the responsibilities of ORSA (the Options Regulatory Surveillance Authority). Previously, ORSA was the route to file a complaint.

So SEC and FINRA are working on this at present. I'm on the email list of a few class action law firms due to the number of securities that I own, so I will next present this to them. They won't have an interest in it, but they may know of an eager attorney who might. The attorney can make a F.O.I.L. request for all the information on the trades of that Thursday afternoon.

Alas, now we've learned the "regulatory process". I'll keep you all posted on what develops, if anything. I thank you both for assisting me with this.