Husband of Amazon employee sentenced to prison for insider trading Amazon stock

https://www.justice.gov/usao-wdwa/pr/husband-amazon-employee-sentenced-prison-insider-trading-amazon-stock

by catillac • 5 years ago

234 227 5 years ago

lizdax3• 5 years ago

he obtained from his wife, an Amazon finance employee, to place trades in Amazon stock–making a profit of $1,428,264
Bohra engaged in illegal insider trading in advance of 11 straight earnings announcements.”
He and his family members have paid $2,652,899 in disgorgement, interest and penalties.

And 26 months in prison! This is why if you're going to do any kind of trading yourself -- never touch the company you work for.

Some more info on the original SEC filing as well: https://www.sec.gov/litigation/complaints/2020/comp24923.pdf

samfisher832• 5 years ago

How did his wife get no prison time?

SommaRaikkonen• 5 years ago

From the article

As part of the plea agreement, Bohra’s wife will not face criminal charges. Bohra’s wife is no longer employed at Amazon.

nprz• 5 years ago

They can't arrest a husband and wife for the same crime.

bhahn• 5 years ago

Just speculation, but they may have children, and if so, prosecutors may have wanted to keep at least one parent out of jail.

tech-historian2• 5 years ago

She only committed some light treason.

vmception2• 5 years ago

They kicked back and relaxed, Emphasis on kickback.

Basically they were able to cough up the $2mm the SEC wanted in the parallel civil suit, and didnt attempt to challenge the criminal case, so the prosecutors in the criminal case chose not to

randyrand• 5 years ago

https://en.wikipedia.org/wiki/Women-are-wonderful_effect

Women generally get less time for the same crime.

nradov3• 5 years ago

There's nothing illegal about trading your employer's stock if you don't have access to insider information. Millions of investors do that with no problems.

refurb4• 5 years ago

Plenty of employers have company-wide blackouts for any stock trade in advance of earnings. So even if you don't have access to inside information you may be subject to company policies that prohibit it.

sellyme2• 5 years ago

Something being technically legal under some conditions doesn't automatically make it sound financial advice.

There's a lot of companies out there. It's easy to pick one that definitely won't get you in to trouble instead of one that probably won't get you in to trouble.

dheera2• 5 years ago

Even if you do have access to insider information it should be (in my opinion) still legal to trade the stock.

There should instead be restrictions on the time for an order to go through, not on the act of insider trading.

subhro2• 5 years ago

Sure. But there are so many companies listed. Will the world for you totally turn upside down if you stay away from one listed company? Maybe a particular trade is legal, maybe it is not. Why bother to take the trouble?

whymauri• 5 years ago

Millions of investors do that with no problems.

Err, example please? I'm totally blanking here, not gonna lie.

lizdax3• 5 years ago

Adding a note, according to the initial filings from the SEC:

As further explained in Amazon’s Insider Trading FAQs, “puts, calls, warrants and other types of option securities” were required to “be cleared in advance with the Legal Department, regardless of whether that employee is otherwise subject to preclearance or to the trading window, even if that employee is not in possession of material nonpublic information.”

Amazon employees require Amazon's Legal approval before trading Amazon options.

page 6, #17-21

wolfretcrap• 5 years ago

If simply being husband of a woman who works for Amazon can help you acquire such information on which you can perform insider trading.

What stops from former workers at intelligence agencies from starting a hedge fund and employing all methods they learned while at work, to acquire such valuable information, trade based on that and offer others money management services?

ForHackernews• 5 years ago

There are laws against corporate espionage. In terms of legal intelligence gathering, hedge funds already do that: https://newsroom.haas.berkeley.edu/how-hedge-funds-use-satel...

staplers• 5 years ago

I'd guess the same thing that stops Senators from trading on inside knowledge of global issues.. nothing

sfifs• 5 years ago

What stops from former workers at intelligence agencies from starting a hedge fund and employing all methods they learned while at work, to acquire such valuable information, trade based on that and offer others money management services?

That wouldn't be insider trading. Indeed hedge funds are known to use intelligence data like satellite photos etc.

If they use illegal monitoring devices, hacking for info etc, they may fall afoul of federal espionage, wiretapping or CFFA, but it would still not be insider trading.

vmception2• 5 years ago

Usually just the lack of startup capital and lack of pedigree to get wealthy enough investors

There isn’t an inherent legal issue here

Insider trading also requires you or the person you got information from to have a fiduciary or contractual duty not to share information

That typically ends after employment or when the NDA expires

There is nothing illegal about having an advantage in the market, if thats the assumption where you are starting from

TwoBit2• 5 years ago

He blatantly traded those 11 times during blackout periods. Companies make it very clear what these blackout periods are, so this was very stupid, as he was bound to get caught.

fy20• 5 years ago

I wonder if he would have been caught if instead of buying Amazon directly, he bought an index fund that has them? I think Amazon makes up something like 3% of some of the Vanguard index funds.

yarcob2• 5 years ago

I assume that the guy bought some type of short term options on Amazon to bet on rising/falling stock prices. I don't think buying an index fund, even with insider information, would allow for such massive profits.

0_____0• 5 years ago

Would love to see the same penalties applied to members of congress who used info from private briefings at the start of the coronavirus pandemic to make stock trades. :|

AviationAtom• 5 years ago

They get special treatment

DevKoala3• 5 years ago

This 100%. For example, Nancy Pelosi should be named the Wolf of Wall Street. Look at that amazing trade she made on cyber security companies right before the hacks on the government were announced.

Source: https://housestockwatcher.com/summary_by_rep/Hon.%20Nancy%20...

alexatalktome• 5 years ago

Can you name the companies and a source? I recall a few weeks ago there was a HN post about congressman but I didn’t recall seeing cyber security in the list.

lilyball• 5 years ago

Nancy Pelosi’s story is her husband does the stock trading without her involvement (or even her knowledge prior to her regular reports to Congress about trading activity). If true (and assuming she’s not giving privileged info to her husband), that means no insider trading.

Having said that, I really think Congresspeople should be prohibited from trading in individual stocks entirely, and restricted to just investing in index funds, if for no other reason than the PR problem of congresspeople appearing to profit off of their position.

tessierashpool• 5 years ago

you changed the subject, though, or at least the target. parent comment was about David Perdue and Kelly Loeffler, the two GOP senators who profited off the pandemic; this post redirects the topic, and the outrage, to Nancy Pelosi.

it’s 100% legit to say that any Congressperson who trades stocks unethically should be criticized. but when I saw a deft change of target like this, I was not at all surprised to find you defending Trump in your post history.

I’m partisan too, but let’s keep it above board.

fighterpilot2• 5 years ago

Or when she or her husband longed TSLA calls a few days before Biden announced the government (Secret Service? Forgot exactly which part) will be buying EVs.

sneak4• 5 years ago

Those private briefings likely did not contain nonpublic information, or especially nonpublic information about specific companies.

The pandemic seemed obvious in February; I know dozens (myself included) who bought masks and supplies long before the run on stores, long before even the USG was lying to people telling them not to wear masks (to preserve the supply). The briefings were around then. Were I a gambling man, I too would have shorted airlines then, and I wasn't in any of those private briefings.

The abuse is when they trade and then pass laws affecting the industries. A lot of kerfuffle has been around the covid briefings, but they didn't get anything an observant outsider couldn't see as well.

It has to be nonpublic information to be insider trading.

kaesar143• 5 years ago

The stock market didn’t start to decline until Mid March so by definition the majority of “betting men” were still not sure the pandemic would have as far reaching of effects they did. It’s highly suspicious that US Congressmen did after getting briefs that were presumably not public information.

brewdad4• 5 years ago

There absolutely was nonpublic information. Probably not about individual companies but certainly about the degree of the looming impact to the global economy.

leephillips2• 5 years ago

Before passage of the STOCK act in 2012, there was disagreement whether members of congress could be prosecuted for insider trading.

runawaybottle2• 5 years ago

How do they prove this? A lot of people play earnings. Amazon is not an obscure stock. In fact, making an earnings play on Amazon is probably one of the more reasonable safer things to do compared to what the world is up to now days.

ApolloRising• 5 years ago

Hard to guess right 11 times in a row.

runawaybottle2• 5 years ago

But here’s the thing, Amazon is the type of company that most likely beat earnings for an entire decade. It’s not hard to guess at all.

Edit: blah, nevermind: https://techcrunch.com/2019/10/24/after-its-first-earnings-m...

I guess if he dodged those earnings plays, that would build a good case.

LanceH2• 5 years ago

He needed Clinton's lawyer.

toddmatthews• 5 years ago

his wife would have been in a black out period where she's not allowed to be trading Amazon stock if she works there. i'm not sure if the blackouts specifically applies to the husband, but him doing this 11 times right before an earning call? its kinda blatant

edit: Blackouts include the employee and all family members. You can not trade during blackout periods.

reverend_gonzo• 5 years ago

If you only do it for one stock, do it for every earnings, and have a win rate of 100%, that becomes pretty obvious.

Also, by the way, they were legally not allowed to trade during those times at all, due to her specific job and the blackout period that cme with.

dnautics2• 5 years ago

Out of curiosity what was the outcome of each of these? Did Amazon drop on any of them? Hypothetically if they're all up, then it suddenly seems way less sketchy.

bin_bash2• 5 years ago

He pleaded guilty so it doesn’t matter in this case

riffraff• 5 years ago

He and the wife pleaded guilty, so presumably they had enough proof. From the article it seems she had material access to finance data and was under obligation to not do trades so they would just need to prove he spoke with her about it.

pcurve• 5 years ago

Since they got a guilty plea out of him, I'm guessing they had strong enough proof to discourage him from going to trial where he could've risked up to 25 years in jail time if jury found the evidence credible.

If he had just stuck with stocks, I'm sure it would've been harder to prove. But with options and dates, timing of it... it's hard to get away.

dnautics2• 5 years ago

Earnings calls dates are announced ahead of time, so that doesn't factor in to it.

mrandish• 5 years ago

They look for accounts that make consistently "lucky" large trades during blackout periods before earnings but at or just after the close of the quarter. Then they run the SSN/address/bank accounts/phone # associated with the trading account and compare to lists of insiders supplied by companies of who has access to their financial info.

I think they also have separate flags on insider's tax returns to look for any unusual capital gains from market transactions. It's not a trivial problem to make trades in an account completely unrelated to you and then get the illegit proceeds back into your control without tripping some flags.

Also, most of the volume in these stocks are huge algorithmic trades from institutional investors and funds. They also tend to move in herds based on when analysts release new reports or change ratings on the stock. Thus, those are pretty easy to filter out of a search. Unusual trades from individual brokerage accounts are going to stand-out. Especially if those accounts aren't making similar trades in other stocks.

When they get suspicious matches they run them down to see if there's anything there. I used to be an insider at a big tech company and there's quite a bit of scrutiny. You'd have to be really stupid to do that shit. Especially repeatedly with large amounts.

crispyambulance3• 5 years ago

  > When they [the SEC] get suspicious matches they run them down to see if there's anything there

This is correct!

mbg721• 5 years ago

They look for accounts that make consistently "lucky" large trades

Sounds like how casinos ban card-counters.

brewdad4• 5 years ago

Well for starters, his wife was forbidden to trade AMZN during the dates in question. When they find an account owned by her spouse, and possibly jointly, doing such trades it's not hard to figure it out.

Also, had he done this once or twice, they might not have found it but 11 quarters in a row is going to get noticed eventually.

ALittleLight3• 5 years ago

Gained 1.5 million. Lost 2.6 plus two years in prison and his wife's job. Not a great trade.

lotsofpulp2• 5 years ago

Could have bought a few houses around town and made more money.

lightgreen7• 5 years ago

Great financial advice from a poor guy.

smnrchrds• 5 years ago

If you ignore all the ethical aspects of it and look at it as a purely economic transaction, whether it was a great trade or not depends on the odds of getting caught, not just the punishment if you get caught.

ALittleLight3• 5 years ago

That's true. I wonder what the odds of getting caught are. I wonder how the odds would change if you had someone unconnected to you who placed the trades and shared the profits.

As I write this I can imagine a cryptocurrency marketplace for insider information. The insider asserts some fact about a company and stakes an amount in crypto. Buyers see the potential - e.g. "Amazon insider staking 1 million for X% return" and can choose to take on the deal or not. If the buyer does take on the deal they see the information and if the information is borne out then the buyer must return the insider's investment plus X%. Otherwise the buyer gets the insider's stake.

There's a lot of rough edges and potential for abuse, but I can imagine something like this making it hard or impossible to prove insider trading.

boublepop• 5 years ago

True. They forgot the first rule of insider trading. You have to be rich before you do it. It’s off limit outside the elite.

spoonjim• 5 years ago

Insider trade a million, you’ve got a problem. You have to insider trade a billion so that you’re untouchable. This is probably the hourly volume of insider trading at many hedge funds like SAC.

pwillia7• 5 years ago

hey bro earnings gonna be good?

lightgreen7• 5 years ago

You have to insider trade a billion so that you’re untouchable.

Some source of that? I believe that is not true. Other shareholders don't really want managers to profit from insider trading.

rasz2• 5 years ago

Print $billions/month of fake electronic money and NYAG will negotiate with you for over a year to finally decide on a gift "penalty" of empty promise and a less than 12hours of your fake money printing volume. cough Tether cough.

derivagral• 5 years ago

Anecdotally, the "price" is closer to 50+ mil, not 1 bil. Hopefully that will change for the better in my lifetime.

sumedh3• 5 years ago

Steve Cohen did not go to jail despite his firm pleasing guilty.

https://en.wikipedia.org/wiki/Steve_Cohen_(businessman)#SEC_...

lucasyvas• 5 years ago

Does anyone honestly care about a million dollar trade by some employee's husband?

The bar for insider trading is hilariously low - this seems like a total waste of time and resources when you could be chasing whales like you should be.

tech-historian2• 5 years ago

It's interesting to think about the incentives. Look at the press they're getting. It's at the top of HN and will be fodder on all major news outlets. It was probably an easy slam dunk case for the prosectors.

brewdad4• 5 years ago

Considering he did this 11 quarters in a row, this might be the most rim-shaking slam dunk in the history of slam dunks.

catillac2• 5 years ago

About one person, probably not. I think this one hits close to home for a lot of us that have stock in many of these large companies from being employees. Granted, this situation seems particularly egregious, trading off of insider financial information not even available to most employees, but still.

I believe the intent was to provide a chilling effect on regular people at FAMGAN-type companies who may have some access to insider information and were perhaps toying with the prospect of acting on it.

sebmellen• 5 years ago

I was sure the acronym was FAGMAN...

crispyambulance3• 5 years ago

...this seems like a total waste of time and resources when you could be chasing whales like you should be.

That's what the Bohra's thought!

It's what a lot of insider trading criminals think. They think the SEC has "thresholds" and only go after "whales". They don't, they look for patterns and go for it. Low hanging fruit is irresistible for them, it's not a "waste of resources."

What's ironic is the that typical insider trading criminals are well-compensated exec level staff. These people pull in Nx100K total comp. The thing is, at those level their peers have wildly variable net-worth. Some come from dynastic wealth, others clawed their way up from ordinary backgrounds. Tragically the ones who clawed their way up tend to suffer from envy when they look at the toys some of their old-money peers have-- they end up looking for "shortcuts" to keep up with the Joneses. Envy can lead to ugly things.

egman_ekki• 5 years ago

They think the SEC has "thresholds" and only go after "whales". They don't, they look for patterns and go for it.

So you think if someone earns 50 bucks for beer with insider trades each year, they will go after them? I mean why not, but I guess there has to be a line somewhere.

sellyme2• 5 years ago

Does anyone honestly care about a million dollar trade by some employee's husband?

Yes.

this seems like a total waste of time and resources

I'm willing to bet that the investigation and prosecution cost less than the ~$1.2 million in excess fines Bohra had to pay. Not really a waste of resources if it's a profitable endeavour.

Hamuko• 5 years ago

The bar for insider trading is hilariously low

I've personally never considered a million dollars a low-ball figure.

lightgreen7• 5 years ago

Does anyone honestly care about a million dollar trade by some employee's husband?

It is not just random million dollars trade. Money are not created out of thin air, money are taken from someone. In this case, money was taken from Amazon shareholders. 0.000001 of each shareholder approximately.

Generally, insider trading hurts trust in financial system, and when it happens unpunished, each american citizen is hurt.

gher-shyu3i• 5 years ago

There is already no trust in the financial system (it's based on usury after all).

agotterer• 5 years ago

How does this even end up on the SEC or IRS radar? $1.4M seems like a blip in the grand scheme of things.

catillac2• 5 years ago

I don’t know about IRS but SEC enforcement actions are largely driven by complaints from regular people. Perhaps the stock broker got suspicious and acted per their ethical duties, or perhaps one of them wasn’t as tight lipped as they would have needed to be.

dboreham• 5 years ago

Perhaps the husband and wife are not getting along so well now and one of them snitched on the other?

travisjungroth2• 5 years ago

The initial insider trading analysis is automated. Dude traded in front of 11 straight earnings calls. That’s gonna get you put on a list.

Mauricebranagh2• 5 years ago

Or maybe someone at amazon tipped the SEC off

ping_pong3• 5 years ago

SEC targets regular people to keep us in line. They let big institutional traders and connected people go.

refurb4• 5 years ago

I have no doubt the SEC has a bunch of rules they use to flag suspicious transactions. The data analysis spits out a few names and they follow up in person to see who lawyers up and who cracks under pressure.

It's also why Matt Levine's "rules of insider trading" includes "Don’t do it by buying short-dated out-of-the-money call options on merger targets".

Certain transactions are suspicious as hell, especially when they can look at your trading history and determine you've never really traded much and just opened the account 2 days prior and made a $100,000 bet on the trade. Or for the really clever people, they find out although you made a suspicious trade you don't work for Amazon, but LinkedIn says you're the wife of someone who works in finance there. Oops!

Though I wonder if that rule needs to be updated with r/WSB doing these trades all the time.

https://www.bloomberg.com/opinion/articles/2018-08-12/the-10...

travisjungroth2• 5 years ago

Today’s Money Stuff was on exactly this. Under “Insider Trading”: https://www.bloomberg.com/opinion/articles/2021-06-10/maybe-...

dheera2• 5 years ago

I don't understand why "wife" has any legal bearing on this. What if it was a girlfriend? What if it was a friend? What if it was some random dude on reddit?

omegaham• 5 years ago

It's really easy to look for trades before significant stock jumps. In this case, he made profitable trades before 11 straight earnings announcements. I'm sure their analysis flagged his trades, and then when they found out that his wife works at Amazon, they declared, "I choose you, Pikachu!"

midnightclubbed• 5 years ago

His wife was probably already flagged on the SEC system as having access to Amazon financials. It seems fairly likely the trades were marked as potentially suspicious and once the volume hit some threshold they were escalated to a human investigator.

My wife has a series 7 security trading license. The SEC requires our personal trading accounts be flagged with this information along with information regarding my employer. Any trades I make in my employer's stock take additional processing time (along with standard blackout periods etc). I would assume people with restricted access to corporate financial statements are flagged and tracked similarly by the SEC.

seanmcdirmid3• 5 years ago

Low hanging fruit. These kind of trading activities are almost super easy to catch, its like a small fish cheating on their taxes, software will detect it eventually.

rasz2• 5 years ago

That was the highest irregularity they could detect committed by people with no significant connections.

ping_pong3• 5 years ago

I love how no one on Wall Street was convicted of anything criminal even though they almost destroyed the entire global financial system. There was even text messages of fraud being committed and nothing happened. Not even clawbacks or fines or anything. The government just let them go. That was so disappointing, and one of the first signs of how Obama was going to betray the progressives and let Bush's status quo remain. It was pretty sickening to watch the entire thing play out and then end with nothing.

nverno• 5 years ago

Well not nothing, we got a nice lesson on how the world works :D

chrisjharris2• 5 years ago

I don't disagree with the general sentiment that the GFC was a total disaster, and I'd certainly not argue against the idea that a system had developed that had poor incentives, with sometimes greedy and unethical people working in it. What kind of concerns me, though, is the way that poor decision-making is conflated with breaking the law, or the belief that a terrible outcome ex-post necessarily implies illegality. I don't really see this logic being applied in other walks of life - in most jobs, if you are incompetent, or even incompetent and amoral, you wouldn't expect to be prosecuted.

For the most part I'd not see the GFC as a morality tale but rather a kind of weird emergent phenomena whereby one area of the economy became so big and complex that it was beyond's anyone's ability to manage, and the interactions of the millions of bit players in it - all of whom in their own way wanted to succeed and do well for themselves - led to this collectively disastrous outcome.

Which isn't to say that nothing illegal occurred - I'm not sure how you'd draw a boundary around the GFC but there were a number of securities fraud prosecutions in the years afterwards - but I think if you take the GFC and subtract all illegal behaviour, you'd still have the GFC.

ping_pong3• 5 years ago

The GFC is a direct result of illegal behavior. If you don't understand that, you don't understand the GFC. The major problem is that Wall Street investment banks were marking shitty debt as AAA when it was no such thing. Because it was marked as AAA, the bad debt was bought throughout the globe because pensions and funds globally wanted only AAA debt. They knew the debt was shitty even as they were marking them as AAA and they didn't care. Once the debt started blowing up, all of these companies that thought they had AAA debt ended up holding onto shitty debt and it put everything at risk.

It's pure unadulterated fraud. No one was punished.

sumedh3• 5 years ago

became so big and complex that it was beyond's anyone's ability to manage,

No that is now true, people wanted to regulate derivatives but Alan Greenspan and others who were in power decided not to.

kbenson• 5 years ago

one of the first signs of how Obama was going to betray the progressives and let Bush's status quo remain.

Was it Bush's status quo? That's not an insinuation or loaded question, I'm just wondering if Bush just perpetuated what came before (from Clinton, or Reagan, or Bush Sr.), and Obama continued in that tradition.

I assume there was more teeth to enforcement of this at some point in the past (I hope), but don't really know enough to know when that would have been.

lightgreen7• 5 years ago

What law they violated? I'm curious, I really don't know.

sjreese• 5 years ago

In this case, it was a planned crime, with profits ship to Seychelles(no aml) and then on to India. Had a fine been possible, no jail time. This type of corruption is never single sourced - the information transfer for all value types, are done where schema and data(databases in total) -- leaving US national security for sale eg "sunburst" and public data in the hands of ( car warranties stalkers ) In sum, all Amazon data has is in the hands of India criminal networks having for travel, fake ids and blackmail .. leaving American youth unqualified for jobs in their country.. its hard to compete against fake credentials and coordinated action ( the results are obvious )

leephillips2• 5 years ago

Stories like this boggle my mind. How do such people think that they are going to get away with this? If I were going to try something like this I would at least make some attempt to obfuscate my activities; trading through proxies, mixing in losing trades, something.

JumpCrisscross• 5 years ago

How do such people think that they are going to get away with this?

Many Americans think insider trading is l common than. If everyone is getting away with 70 mph, you can too. (Exhibit A: this thread.)

In reality, insider trading enforcement is effective. The SEC looks for unusually profitable trades ex post facto. Their verification is easier than the insider trading. Wall Street doesn’t insider trade because it’s stupid and there are lower-hanging fruit.

seanmcdirmid3• 5 years ago

Were they even American?

I've heard more than a few stories of immigrants coming the states, working tech jobs, and ... getting thrown in jail for insider trading because their stock market worked very very very differently back home. It has gotten so bad that many of the big techs include mandatory training on what inside trading is and how not to do it.

tarsinge• 5 years ago

Hard to believe when I see https://en.m.wikipedia.org/wiki/2020_congressional_insider_t...

BelenusMordred• 5 years ago

In reality, insider trading enforcement is effective.

This is impossible to know just like many other crimes.

sumedh3• 5 years ago

Wall Street doesn’t insider trade because it’s stupid and there are lower-hanging fruit.

They do, its just that the CEO does not go to to jail

https://en.wikipedia.org/wiki/Steve_Cohen_(businessman)#SEC_...

ta3463737• 5 years ago

If you're in a position to know that kind of information, especially for a behemoth like Amazon, the banks they deal with are going to keep a close eye on you, and your close family (and they've seen most tricks in the book I'd guess).

Just foolish and overconfident, although the fact the dad was mentioned probably means they roped him into doing the deeds thinking it'd be a connection removed enough.

Two tech salaries between em, and they still got greedy. I don't really understand that, trashed their careers ongoing.

10x-dev• 5 years ago

Having worked at Amazon, I know the employees are fully aware of blackout periods. There is no way to claim plausible deniability there.

It is easier for clueless household members to get a hold of the earnings statement or unknowingly trade AMZN during blackout periods, so in some cases I can see how an honest mistake could happen.

However, this guy traded 1.5M 11 times during blackout periods ahead of earning statements. There is just no way to claim ignorance there. He had to have known that it's illegal.

I can't even begin to imagine the hubris or the stupidity. If they put Martha Stewart in prison for insider trading, they'll obviously put the husband of an Amazon employee without blinking. What was he thinking?

geoduck14• 5 years ago

Martha Stewart went to prison for LYING about insider trading.

Thorrez2• 5 years ago

And even outside the blackout period, if you have material information that isn't publicly known and came from an inside source, it's illegal to trade.

lordnacho2• 5 years ago

I think people simply don't appreciate that it's an easily caught crime. Most illegal things that one might do won't ever be caught, eg you break into someone's house and it would take the police to bother investigating and then put enough effort into that one case. Or to stay in white collar you might forget to report some income, how's the tax man to know unless you are already in focus?

With insider trading the investigation is a DB query. It costs very little to look at all the trades for everyone around announcements and see who was acting suspiciously.

TwoBit2• 5 years ago

And it's probably all automated.

arp242• 5 years ago

How do they know his wife worked for Amazon? Is this recorded? Or do you need to declare stuff like that?

I don't know anything about trading; in naïve view would be that unless they have quite a bit of information about you that's not necessarily all that easily obtainable, it's not always so easy to detect?

LatteLazy• 5 years ago

It should NOT be easy for a family member to get hold of a non public earnings statement. That stuff is highly confidential. You generally can't take it out of a small set of private offices, let alone leave it on the dining table...

camjohnson262• 5 years ago

What a waste of time and resources. You could argue this behavior helps information leak into the market.

antonzabirko3• 5 years ago

This man sent to jail. How many politicians were sent to jail for covid insider trading? What about the billions Jeff Bezos fleeced in taxes? It's the rich man's world, where justice is only onto the poor.

yunohn• 5 years ago

The sad part is the stark difference in comments here and on that article [1]. People were skeptical that politicians could commit insider trading, but this couple of course deserves to be jailed…

[1] https://news.ycombinator.com/item?id=27406243

lightgreen7• 5 years ago

How many politicians were sent to jail for covid insider trading?

What is covid insider trading?

What about the billions Jeff Bezos fleeced in taxes?

I believe Jeff Bezos did no violate the law, but that's really offtopic here.

It's the rich man's world, where justice is only onto the poor.

Tell that to all the rich guys went to jail.

Or if you have some statistical evidence, I'd love to read it.

antonzabirko3• 5 years ago

Jeff leverages trillions in infrastructure, the maintenance of which costs billions. Taxpayers subsidize that. You aru not being genuine with your words, but this I will clear up.

88840-88552• 5 years ago

This dude is referring to: https://en.m.wikipedia.org/wiki/2020_congressional_insider_t...

However, on February 13, he and his wife sold between $628,000 and $1.7 million worth of stock through thirty-three transactions and on February 27
NPR asked Caitlin Carroll, Burr's spokesperson, for a comment on the alleged violations and she responded with "lol"
On May 13, the FBI seized Burr's phone, to investigate his communications with his stock broker, among other warrants, including one to search his personal iCloud account
On May 26, the Justice Department announced that it had ended its investigation into Feinstein, Inhofe, and Loeffler.[18] On January 19, 2021, the Justice Department closed its investigation into Burr

trosi• 5 years ago

I agree with the first part, but it doesn't look like he was poor (the husband I mean). He had a lot of money and he wanted more

aaomidi• 5 years ago

Rules for thee but not me

havocsupreme• 5 years ago

I'll be honest, the title of the announcement made by the justice department looks like a news article title written by journalists and not by a government office. I have nothing against journalists or attorneys, the subject just doesn't look right.

tomcam• 5 years ago

If he were smart he’d just run for Congress, where insider trading is allowed.

legohead• 5 years ago

https://en.wikipedia.org/wiki/STOCK_Act

Olreich• 5 years ago

It’s not very effective…

https://en.wikipedia.org/wiki/2020_congressional_insider_tra...

88840-88552• 5 years ago

I am wondering if there could be a way to outsmart the system. Perhaps trades are monitored automatically and once flagged for suspicious timing and returns, they are reviewed manually.

What if someone was trading in a smart way, e.g. purpusfully accepting losses on the same stock/derivate, trading during non-blackout periods, focusing on more than one stock excessively. This could reduce the risk for automatic detection. And finally, when you are reviewed manually, you should be able to present some fancy excel models that you pull out your ass to support your "buying decisions" when you made the insider trading moves.

The biggest thing would be, however, to keep your partner in crime at distance so there is not obvious evidence that you spoke about trading.

I wonder how hard it is to outsmart the system and I can imagine that there are many people out there who play it very well.

hnarayanan• 5 years ago

Obviously this.

zfxfr• 5 years ago

I am French. I have never been to America. From my point of view, so the view of an European who only know USA through the eyes of various medias. I am under the impression that justice sentences are very harsh there ! It looks like anybody can be sent to prison for pretty much nothing.

Wow ! 26 months ! In France he would have been sentenced to 4 or 5 SUSPENDED months.

My parents and some of their friends plans to go to USA for tourism I hope they don't get arrested (pulled over). My dad speaks English "like a Spanish cow" and his attempt at making jokes might not please the officers.

Mauricebranagh2• 5 years ago

Depends did Papa go to ENA with the right people.

Why do you think that serious white collar crime shouldn't involve jail time.

bagacrap• 5 years ago

minimum security and he'll get out early for good behavior. Curious though, do you think a slap on the wrist would be better in this case? Would you also recommend a non-sentence if he broke into homes to steal $1.5M?

mikestew2• 5 years ago

Right, because financial fraud measured with 7 digits is exactly the same as being pulled over and talking to a police officer in broken English. (That's sarcasm, in case it doesn't translate well.) I'd argue if all an offender gets for a million dollar crime is a suspended sentence, maybe France needs to get a grip on their white collar crime problem.

Regardless, if all I knew about France was what I saw on "various medias", my view of your country would be just as skewed as your view of mine. It reminds me of an immigrant I worked with in the 80s who spoke of how his relatives and friends back home wanted to know if the U. S. was just like the television show "Dallas". Not in Indianapolis, Indiana, it wasn't. Nor even Dallas, Texas itself, I imagine.

throwaway879• 5 years ago

And members of Congress trading on insider news (before bailout packages etc) get away with it?

jrootabega• 5 years ago

Is that illegal?

Yes. The 2012 STOCK Act prohibits it.

fasteo• 5 years ago

"Rather, Bohra engaged in illegal insider trading in advance of 11 straight earnings announcements"

If he made 11 consecutive trades, he didn't need any insider info, or am I mising something here ?

Husband of Amazon employee sentenced to prison for insider trading Amazon stock

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