Why Prosecuting Insider Trading Is So Problematic
Вставка
- Опубліковано 3 лип 2024
- Insider trading is a type of market abuse when an advantageous trade is made based on material nonpublic information. The issue is there’s not a specific law defining what insider trading is, which makes it difficult to prosecute cases as they arise. Additionally, a major component of prosecuting a case is proving intent, which requires a lot of evidence to support the claim. Watch the video above to learn more about what insider trading is and why it’s so difficult to stop.
Chapters:
00:00 - Introduction
01:22 - Defining insider trading
03:19 - Prosecuting insider trading
07:41 - Who gets investigated?
10:27 - Activist investors
Produced by: Charlotte Morabito
Additional Reporting by: Mary Hanan, Meghan Lisson
Camera by: Junghun Park, Gerard Miller, Marco Mastrorilli, Bob Briscoe
Audio by: Paul Alfe, Francesco Lo Cascio, Juan Roche
Edited by: Nora Rappaport
Animation: Mallory Brangan
Supervising Producer: Lindsey Jacobson
» Subscribe to CNBC: cnb.cx/SubscribeCNBC
» Subscribe to CNBC TV: cnb.cx/SubscribeCNBCtelevision
About CNBC: From 'Wall Street' to 'Main Street' to award winning original documentaries and Reality TV series, CNBC has you covered. Experience special sneak peeks of your favorite shows, exclusive video and more.
Connect with CNBC News Online
Get the latest news: www.cnbc.com/
Follow CNBC on LinkedIn: cnb.cx/LinkedInCNBC
Follow CNBC News on Facebook: cnb.cx/LikeCNBC
Follow CNBC News on Twitter: cnb.cx/FollowCNBC
Follow CNBC News on Instagram: cnb.cx/InstagramCNBC
#CNBC
Why Prosecuting Insider Trading Is So Problematic
It's hard to stop because the lawmakers are the biggest culprits.
Especially the ones asking for 12 billion dollars in tax payer money to funnel it to smaller business they’ve already invested in.😂
Politicians should be able to invest too
@@PelosiStockPortfolio 😂
@@PelosiStockPortfolioThey should. After they're done serving. Which goes into a bigger topic of term limits.
Exactly, if they prosecute then they open the door to convict themselves.
Because politicians never arrest themselves
Unless they are hacked by the Phantom Thieves and have a change of heart.
politicians will never want to stop insider trading because politicians are the biggest winners when it comes down to insider trading. there's a lot of information left out of this video.
Like Nancy pelosi
Murder is hard to stop. Anyone can murder. The difference is that we prosecute murderers instead of giving them a fine that’s 1/1000th of their net worth.
Of course. But that will never, ever happen. Rich gotta rich, poor gotta serve. Everyone is required to remain in their own lanes.. Otherwise, they can "exit". 😂🤣😂
Murdering someone is far worse than inside trading.
Why is insider trading so hard to stop? Because everyone at the federal reserve and White House does it.
Close. It's mostly run of the mill representatives and their staffers that do it, and to a lesser extent, executives of the bureaucracies themselves.
@@WeatherManToBe Well, also with how out of control Wall St has became knowing they pretty much have a blank check from the Federal reserve for 0% loans anytime they get into trouble.. why stop the bad behavior as the feds are pretty much endorsing it.
I wonder why Congress has never defined insider training... 🤔
Hey guys, I know nothing about the market and I'm looking to invest, any help? As well who can I reach out to?
That's true. Its really needful for beginners not to settle for videos alone or they will see themselves losing all their money just like me when I newly started trading with this videos here on UA-cam
Making touch with financial advisors like Julio Castillo he can assist you restructure your portfolio, would be a very creative option. Personal financial management will be crucial to navigating the next difficult times.
I agree with you, With his help, I diversified my 450k portfolio among different markets. During this bearish market period, I was able to produce a net profit of little over $1 million from high dividend yield stocks, ETFs and equity. However, the reality is that you cannot do it without a tried and true trading coach like Julio Castillo
He's awesome he has managed my investment so well and my weekly returns are mind blowing.
Could someone kindly leave his details here?.
+346
How are you not prosecuting senators and congressman? This needs to happen. Makes me freaking sick!
Or current presidents and their sons
what did they do wrong specifically?
Congresspeople who make laws that advantage and disadvantage certain companies and listen to lobbying pitches all day every day are not barred from investing in those companies
Laws don’t apply to law makers. They creating the laws so you comply, they don’t
it's a free market
I would guess it’s so hard to prosecute because the people doing the prosecuting are doing the inside training. The people make laws are all doing it as well.
You came to this video to educated on the matter and you still went reductive. Bravo.
Most people venture into crypto to be a millionaire meanwhile I just want to be debt free
That's very practical and smart goal a wise man once said do everything in your power to get out of debt one of his tips on getting rich
The one thing about being successful is working towards it and not the other way around
Starting early is the best way to getting ahead of build wealth, investing remains the priority
@@madiezancanellatl9205True
Crypto currency will outsmart the banking system in the nearest future serving as a global fiat. Already making over 85% of my investment
I'm sure catching politicians was just as hard at it.
"Why Prosecuting Insider Trading Is So Problematic" Simple answer, the politicians do it and they don't want it to be strictly stopped...
It's hard to prosecute because a lot of powerful people do it and nobody wants to hurt their feelings.
Its hard to stop because it requires american politicians to have integrity
The subtitles on this video are not separated into shorter segments, at 1:36 a huge blob of text covers the screen for example
I have uncle in my family who's retired who recently made around 750k because he heard his friend that works that moved off and got a job at a company in North Carolina. The friend said the company was coming out with certain kind of product. Not really thinking about it but my uncle took initiative and thought it would be a good deal. This was after the stock market crash so he put $50,000 into it from his 401k and he sold it last year for a profit of $748,000
I'm not sure that's exactly insider trading. Anyone could have known that company was hiring, and your dad didn't even know exactly WHAT product was being released, it could've been a total dud.
@@Mcfunface anyway it was inside trading because the information came from or insider, a high level official within the company but just from having casual conversation. He told my uncle information that only people within the company knew, just from having casual conversation about his new job. By the time it reached the public that they were releasing a product, it was a year later and the stock was over $13 He bought it under a dollar. Not like they were scheming trying to make money, My uncle just decided to put some money into it because he thought it would be a big deal and it was.. His friend told him that the stock supposed to go to $20 at least but it went even higher all the way to $67
@@Dee--Jay Oh I was not aware the friend hired was in an executive position. That makes sense
@@Dee--Jayif you remember what was said earlier in the video about intent, this WAS not insider trading.
@@ebubeawachie yeah I don't think it was directly inside of trading. I'm calling it indirectly insider trading because he will still able to gain information that only the insiders knew to profit
Calling someone the Oracle of Omaha is a big joke when we know he is privy to the insider information.
He bought Activision less than a week before Microsoft bought them...and he's best friends with Bill Gates. Hmmmm sounds suss lol
All you have to do is make a sizable donation to your local democratic party and you will be off the hook
The reason insider trading is difficult because lawmakers know how to protect themselves.
0:00: 📈 Insider trading is difficult to prove and prosecute, with no clear definition, and the SEC often focuses on smaller cases rather than big offenders.
3:43: 💼 Insider trading can be prosecuted through civil or criminal law, with the SEC handling civil litigation and the DOJ handling criminal cases.
6:41: 🔍 Justin Paperny, a former securities fraud convict, now helps guide those accused of white collar crimes through investigations, sharing his experience and insights.
8:46: 💰 Insider trading enforcement actions often target defendants who can't afford high-powered representation, but high-profile individuals have also been successfully prosecuted.
11:45: 📈 The rise of meme stocks and social media influencers has raised concerns about market manipulation and the influence of retail investors.
Recap by Tammy AI
Why change a law if lawmakers benefits from it.😅
Why SEC needs funding? Align incentives. 10% of won litigations against wrongdoers on wall street goes to SEC budget. 1% of that gets directly added to SEC employees bonuses. Next?
They get 500% more to look the other way.
Isn’t there a loophole in making the information public (under technicality)?
Doesn’t that make de amplification on social media platforms even more problematic ?
If you make it easier to catch insider trading then the politicians who do it might get caught too so that's why it's still hard
Our politicians do it everyday and get away with it.
It is really hard to do something that you have zero interests on doing.
Great. A matter that should be a main focus on 2023.
It's a big club and you ain't in it. -George Carlin
Self regulated works great when ALL of the ‘selfs’ do what’s right and in the spirit of ethics & morals!
Hard to stop when prosecutors are the ones doing it lol
I don't see how someone who gets an inside tip is not supposed to act on it. Are they supposed to do nothing and take a financial loss?
Even when there are emails/messages, they get off on a technicality.
They why do we even pay this SEC overpaid employees?!?!😡
I mean let’s be real, options are literally designed for insider trading. When we specifically design tools for insider trading how do we expect to stop it? 😅
How are options designed for insider trading?
what are you talking about dude?
They were designed as insurance. Just like I buy insurance on my car, house etc. An option allow me to buy insurance on stocks etc.
I spent time to watch the entire story of the ads😂
In my circles we call what they try to describe as investment advice 😊
Ask any member of Congress
What is worse wealthy entitled individuals "insider trading" or wealthy entitled individuals "naked short selling" and having retail investors buying those "counterfeit shares" they're selling? $MMTLP #FINRAFRAUD
Football (super bowls) and Kentucky derbies do this. They rig the game and race knowing people bet and some are given details on who to bet on. This happens all the time
does "material information" include offering to pay off a near worthless bond that's in default after buying the majority of issued debt. then selling at higher value immediately while you pay off balance over time........just seems that people should bet on things that they can influence.
Insider trading is a difficult crime to prove, as it requires proving intent without a smoking gun of evidence, such as an email explicitly stating the intent to manipulate stock prices. Martha Stewart was famously accused of insider trading but was actually convicted of obstruction of justice. Congress has not explicitly defined insider trading, leading to two theories: classical insider trading, where an officer or director of a company uses confidential information for personal gain, and misappropriation, where individuals outside the corporation use confidential information to trade. Insider trading can be prosecuted through civil or criminal law, with the Securities and Exchange Commission handling civil litigation at the federal level and the Department of Justice handling criminal cases. In 2022, the SEC amended an existing rule to enhance investor protections against insider trading, leading to the first insider trading case prosecuted exclusively based on this rule in March 2023. The SEC took on 760 total enforcement actions in fiscal year 2022 and recovered more than $6.4 billion that year. It's important to distinguish between investigations of reporting rule violations and fraud investigations, as the latter requires evidence of a deceptive scheme. Overall, insider trading remains difficult to stop due to the lack of a clear definition and the challenge of proving intent.
“Its one big club & you aint in it”
I hope those scamming and moving with bad/foul intentions are taking note that EVERYONE is getting their karma and a lot is being exposed in this decade. *What goes around, comes around* is a real thing and that's why I move with good intentions, I can't afford no bad karma, vibez, energy, etc. to come into my life, especially in 2023.
58k so they are going after little people that can’t defend themselves. Nice
always buy undervalued cheap stocks of less risky companies. For more risky companies, just buy FEW shares
Not enough to stop them, a little federal time, equals retirement?
So basically these insider trading laws affect only the poor and middle class... as with EVERY law being passed. It doesn't affect the rich.
1:12 how is insider trading "theft" ?
In the 19th century, did the Dutch royal family make money from insider trading?
We do insider trading all the time but they will never catch us
Now try prosecuting members of congress for insider trading.
Wbt outsider trading like hidenburg research where they short the stock based on non public information. Law doesn't cover it
That means I can do it too?
If I can only find out what companies the Gov will bankroll I can make bank. Can that work
Legalize it because its unenforceable get rid of speculators
Then we have senators using insider knowledge to actively trade, like the Pelosi and McConnell families.
Insider trade is a very easy thing to spot. We are just to scared to put a lable on it.
San Francisco 49ers owner Jed York just today and Tottenham Hotspur owner Joe Lewis just 2 weeks ago.
I don't have to watch this video to know that stocks exist for the sole purpose of insider trading. I'd love to see someone disagree with me on that.
I think of them as a way to buy Ponzi assets.... For the most part stocks are bought from others and seem to have no real reason. Why not just use bonds to loan out money?
If you want to know about insider trading you can ask your buddy Nancy she made millions from it.
Bro these ppl will never arrest each other 😂
Given the current economic difficulties that the country is experiencing in 2023, how can we enhance our earnings during this period of adjustment? I cannot let my $680k savings vanish after putting in so much effort to accumulate them.
Well the bigger the risk, the bigger the reward and such impeccable decisions are better guided by professionals
Yes true, I have been in touch with a financial advisor. With an initial starting reserve of $80k, my advisor chooses the entry and exit commands for my portfolio, which has grown to approximately $550k.
I’ve been looking to switch to an advisor for a while now. Any help pointing me to who your advisor is?
There are a lot of independent advisors you might look into. But i work with NICOLE DESIREE SIMON and I have been working together for nearly four years, and she is excellent. You could proceed with her if she satisfies your discretion. I endorse her
this recommendation came at right time, very much appreciate it. curiously inputted her full name on my browser and found her site top search, no bs.. over 20 years of experience is certainly striking!
Seriously, who add the subs for this video?
They go after little fish because the big fish run the game. And they don't like competition.
Don't give me this BS when we all know politicians and their spouses are free to do as they want with insider info.
13:37 We did answer that question. When Elon Musk tweeted he was taking the company private when he wasn't, knowing he has a lot of followers hanging onto his every word, and was fined for it.
I love how all the comments are blatantly calling out that the only reason there isn't a well defined law purely because both parties make boatloads of money doing it
It’s because they don’t want to.
Catching insider trading is like trying to indict corrupted politicians who are bought by their rich buddies and family. it's legal because they can advocate things they believe in while taking campaign funding. Rules are set up such that they're all illegal and legal at the same time. The only difference between you doing something illegal vs someone else who can get away is they got lawyers and good ones while your lawyers are literally just begging for a lighter sentence.
One crime (most) folks can get away with. Well, I don’t see how it ends good anyways.
Criminals dont stop criminals 😅😂
Cops investigated themselves and found no wrong doing 😅😂
Politicians dont judge themselves 😅😂
Didn't drop the name Musk in any of this. He's the definition of market manipulation.
ask a developer to help
The ones doing it are the ones making and enforcing the law.
The world IS insider trading. Has been for a long time.
Funny they talk about going after Emperor Palpatines but won’t go after the DTCC or NSCC for allowing naked short selling.
Fix your CC please.
5-3
You wanna hear a joke?
THE SEC!
Congress IS insider trading. Nancy Pelosi defended her "right" to insider trade feely in Congress to a reporters face, so of course they aren't eager to define it and make it easier to prosecute.
What if I accidentally get to know confidential information about a company? For example I hear two employees of a company talk to each other in the metro. Can't I use that information for trading?
If you have any question I would say not to use the information but you know your own risk tolerance best.
In your example, it's not "nonpublic" if you overhear it on public transportation, so you'd be okay
@@SmartJanitor Yeah I agree!!!
DRS GME to have the game stop
LOL!!! IT'S FIXED FROM THE TOP DOWN???
just ask chuck Schumer and nancy pelosi for advice on nVidia stock
I will be forever grateful to you, you changed my whole life and I will continue to preach on your behalf for the whole world to hear you saved me from huge financial debt with just a small investment, thank you Maria Reyes.
I'm surprised you know her. I've been making a lot of profits investing with her for a few months now.
Mrs Reyes changed my life because of the high profits I got from investing with her.
You invest with Mrs Reyes too? Wow that woman has been a blessing to me and my family.
I'm new at this, please how can I reach her?
I was skeptical at first till I decided to try. Its huge returns is awesome. I can't say much
Don't forget stock market manipulation by hedge fund market makers by naked shorting. Our proof is the failure to deliver list. 😂
Because people are greedy.
If ur not a politician don’t do insider trading got it.
We need AI to be the judge
Personally, there are only 2 people on UA-cam I trust for any kind of financial advise. Meet Kevin, and Bab Sharpe. Kevin does a lot of analysis of what is driving the market up or down. Bob shows how you "could" make money on certain stocks or ETF's if you follow a strategy. My personal strategy is monthly dividend paying ETF's. I take what I earn and reinvest it. ETF's generally don't have much price fluctuation either.
DIANE FIENSTEIN PAUL PELOSI AND A BUNCH OF REPUBLICAN LEGISLATORS
You meant the Oracle of California aka Pelosi?
why is cnbc better than msnbc,fox and cnn
Let AI run the market, and then it will be harder for insider trading cause they won't be able to manipulate the rules of the market.
Current AI is nowhere near advanced enough and it would probably have a huge amount of exploits that need to be fixed.
Insider? I hardly know her
You can't catch someone if the don't trade because of the data.
QAi will catch them using spare cycles time.
There's a reason folks have started trading like Nancy Pelosi
Nancy pelosi is laughing in the corner
Cough cough. PELOSI!
We can only put poor people in jail. Sorry not sorry.