I get that the SEC monitors for spikes in trading and they take a look at people who sell a large amount of stock before a major event and stuff like that. Is that really enough to prove them guilty, I thought it needed to be undoubtedly proven to be convicted for it, like they have a phone recording of you receiving the information, even though you sold a load of stocks at exactly the right moment that doesn’t necessarily prove that you had insider information. You could have predicted it and moved accordingly by analyzing the companies and coming to your conclusion.
In: Economics
FINRA and SEC will circulate lists of suspicious trades to companies going through M&A or other events that generate large swings in stock price. Suspicious could include taking a large position in a stock you’ve never owned before right before a major change in stock price.
Here’s a perfect example:
https://www.reuters.com/legal/government/prosecutors-say-fbi-trainee-stole-tips-lawyer-girlfriend-trade-merck-deal-2022-07-25/
In this case is girlfriend/ex girlfriend likely reported him once his name was circulated amongst her firm.
Likely then the feds begin investigating and squeezing.
If you were to overhear at a urinal at a bar two M&A lawbros talking about a deal you’d likely get away with it and thus had no connection and also didn’t document your crimes in text message or on wallstreetbets you’d likely be able to get away with it.
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