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Saturday, May 13, 2017

Doug DeCinces convicted of insider trading, awaits sentencing

Former All-Star Doug DeCinces was convicted Friday of insider trading for a stock buy that earned him more than $1 million.

The ex-Baltimore Orioles and Angels third baseman was convicted of 14 federal charges. According to the Orange County Register, each count potentially carries a maximum prison sentence of 20 years.

Jurors deadlocked on 18 other charges and a judge declared a mistrial for those counts, according to the U.S. attorney’s office.

RoyalsRetro (AG#1F) Posted: May 13, 2017 at 12:13 AM | 95 comment(s) Login to Bookmark
  Tags: angels, doug decinces, insider trading, legal, orioles

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   1. Cargo Cultist Posted: May 13, 2017 at 02:19 AM (#5454685)
14 x 20 = 280 years. Let's hope he doesn't get the maximum.

   2. ERROR---Jolly Old St. Nick Posted: May 13, 2017 at 08:28 AM (#5454700)
That'll teach him to steal Brooksie's job.
   3. AROM Posted: May 13, 2017 at 09:43 AM (#5454706)
His greatest mistake remains hitting the ball to Dwight Evans when a sac fly would have put the Angels into the world series. Hit it to Hall of Famer Jim Rice and Rob Wilfong would have scored.
   4. ReggieThomasLives Posted: May 13, 2017 at 10:38 AM (#5454716)
Confused how he was even convicted. He had no fiduciary obligation to safeguard the information.
   5. Cargo Cultist Posted: May 13, 2017 at 11:17 AM (#5454720)
In order to keep the stock market from being used as a large con game more than it already is they penalize both those who illegally share information and those who benefit from illegally shared information.
   6. ReggieThomasLives Posted: May 13, 2017 at 12:45 PM (#5454740)
i think you meant "in order to keep the market less efficient and more easily gamed".

I can understand persecuting the CEO because they have a fiduciary duty but this is overzealous prosecution.
   7. Captain Supporter Posted: May 13, 2017 at 01:35 PM (#5454756)
It simple Reggie. If you obtain inside information that was obtained illegally, don't buy any stock. Martha Stewart went to jail for the same offense.
   8. Bote Man Posted: May 13, 2017 at 02:22 PM (#5454773)
It's simple Reggie. If you obtain inside information that was obtained illegally, don't buy any stock.

OK, but how about options??
   9. Nero Wolfe, Indeed Posted: May 13, 2017 at 02:32 PM (#5454779)
Where do they draw the line, though? Mr. Smith receives insider knowledge of a merger about to happen that will cause the ABC company to rise. He tells his brother, who tells his golf buddy, who mentions it to the guys in his regular foursome, etc... Who's liable and who's not? At which point did it stop being insider trading and just become a hot stock tip?
   10. snapper (history's 42nd greatest monster) Posted: May 13, 2017 at 03:12 PM (#5454787)
Where do they draw the line, though? Mr. Smith receives insider knowledge of a merger about to happen that will cause the ABC company to rise. He tells his brother, who tells his golf buddy, who mentions it to the guys in his regular foursome, etc... Who's liable and who's not? At which point did it stop being insider trading and just become a hot stock tip?

DeCinces got the "hot tip" from the CEO of the company in question. He's clearly well within the limits of where one should know not to trade on that info. Any time your "hot tip" comes with the premise of information that's not yet publicly available, it's insider trading.
   11. ReggieThomasLives Posted: May 13, 2017 at 05:14 PM (#5454857)
It simple Reggie. If you obtain inside information that was obtained illegally, don't buy any stock. Martha Stewart went to jail for the same offense.


She didn't go to jail for insider trading, she could not have been convicted of that.

She was convicted of lying to a federal investigator.
   12. ReggieThomasLives Posted: May 13, 2017 at 05:24 PM (#5454877)
DeCinces got the "hot tip" from the CEO of the company in question. He's clearly well within the limits of where one should know not to trade on that info. Any time your "hot tip" comes with the premise of information that's not yet publicly available, it's insider trading.


Again, the CEO had a fiduciary obligation to safeguard that information, DeCinces did not.

From the SEC, "Illegal insider trading refers generally to buying or selling a security, in breach of a fiduciary duty or other relationship of trust and confidence, while in possession of material, nonpublic information about the security."

The SEC has always pushed the bounds of what insider trading is, or is supposed to be. At one point they claimed you could be convicted of insider trading if you were on a plane landing in New York, looked out the window and saw IBM's main plant blow up in an explosion, and immediately called your broker to short IBM. The SEC has gotten it's wrist slapped on it's broad theories many times.

What DeCince's liability is stems from two theories, first that if an insider entrusts you with inside information you become an insider with same fiduciary responsibilities. I disagree with that, it's incredibly broad. Second is called "Misappropriation Theory" that Doug mislead the CEO and essentially stole the information. Doesn't seem like that happened.

And the reality is that when Doug purchased shares in the market before the acquisition was announced, he made the market more efficient and benefited sellers by paying them closer to true value for their shares than they would have otherwise. He made the market fairer. Insider trading shouldn't even be a crime. Every company has the ability to sign legal agreements with employees, contractors and suppliers to prevent them trading on or telling others, material information about the stock. They can then sue anyone who violates those contracts, no need for federal crimes. And in this case, Decinces has already been fined $2.5M, so why was the criminal trial was even necessary?
   13. snapper (history's 42nd greatest monster) Posted: May 13, 2017 at 05:40 PM (#5454897)

What DeCince's liability is stems from two theories, first that if an insider entrusts you with inside information you become an insider with same fiduciary responsibilities. I disagree with that, it's incredibly broad.


It's not incredibly broad in this case. When a CEO gives you non-public info directly, it's pretty clear you can't trade on it.

I agree with you that the SEC goes too far sometimes; when you get 4 parties down the daisy chain, it hard to call it insider trading. But in this case, it's crystal clear.

If you don't punish this sort of trading, it then becomes trivial for insiders to trade illegally using strawmen.

And the reality is that when Doug purchased shares in the market before the acquisition was announced, he made the market more efficient and benefited sellers by paying them closer to true value for their shares than they would have otherwise. He made the market fairer. Insider trading shouldn't even be a crime.

Disagree.
   14. SBB, Live from the Alt-Center Posted: May 13, 2017 at 07:02 PM (#5454957)
Confused how he was even convicted. He had no fiduciary obligation to safeguard the information.


He was tipped by someone who did. Dirks v. SEC
   15. David Nieporent (now, with children) Posted: May 13, 2017 at 09:10 PM (#5454971)
It simple Reggie. If you obtain inside information that was obtained illegally, don't buy any stock. Martha Stewart went to jail for the same offense.
Martha Stewart went to jail for lying to federal investigators, which is a crime even when there's no underlying crime. It's a common tactic of federal investigators, and a way to get people they can't get any other way. (One of the few BALCO-related athletes to go to jail was sprinter Marion Jones... for lying, not for anything else.) Even something as simple as falsely denying something trivial can land you in jail. This is why, to the FBI even more than to cops, you say "I won't speak to you without a lawyer" if they ask you anything more than the time of day.
   16. Misirlou doesn't live in the restaurant Posted: May 13, 2017 at 09:19 PM (#5454972)
This is why, to the FBI even more than to cops, you say "I won't speak to you without a lawyer" if they ask you anything more than the time of day.


What if your watch is inaccurate?
   17. David Nieporent (now, with children) Posted: May 13, 2017 at 09:20 PM (#5454973)
I was going to rant about the entire idiotic concept of "insider trading," but I see that Reggie beat me to it in #12. So I'll just adopt what he said.

And just add explicitly that there is no rational basis for criminalizing insider trading, especially when applied to non-insiders like DeCinces. To the extent it's a breach of fiduciary duty for a non-insider to trade on non-public information, that's a civil matter between the company and the insider, not a crime. But DeCinces owes no duties and should be under no obligation not to trade on such information no matter how he got it.
   18. David Nieporent (now, with children) Posted: May 13, 2017 at 09:22 PM (#5454974)
If you don't punish this sort of trading, it then becomes trivial for insiders to trade illegally using strawmen.
Not if it's not illegal. (Which, of course, it isn't; they get around that inconvenient fact by calling it "fraud," which it obviously isn't.) Then they can't trade illegally.
   19. snapper (history's 42nd greatest monster) Posted: May 13, 2017 at 10:11 PM (#5454989)
Not if it's not illegal. (Which, of course, it isn't; they get around that inconvenient fact by calling it "fraud," which it obviously isn't.) Then they can't trade illegally.

You think it should be legal for a CEO to use non-public information to profit personally trading his company's stock? That's nuts.

Quite frankly, it should be illegal for a CEO to ever trade in his company's stock without giving public notice. If he wishes to sell stock granted to him as compensation, he should have to announce his intent 30 days in advance.
   20. villainx Posted: May 13, 2017 at 10:37 PM (#5454994)
it should be illegal for a CEO to ever trade in his company's stock without giving public notice. If he wishes to sell stock granted to him as compensation, he should have to announce his intent 30 days in advance.



I thought that already was the case.
   21. David Nieporent (now, with children) Posted: May 13, 2017 at 10:45 PM (#5454998)
You think it should be legal for a CEO to use non-public information to profit personally trading his company's stock? That's nuts.
"That's nuts" isn't actually an argument. Yes, of course it should be legal. As I mentioned, to the extent it's a breach of fiduciary duty, that's between the company and the CEO, not a crime. The argument to the contrary is based on nothing more than some inchoate gut feeling that it's unfair.

It simply makes no sense to ban people from acting on information.
   22. PreservedFish Posted: May 14, 2017 at 12:19 AM (#5455018)
Perhaps if you were allowed to enact all of your other libertarian fantasies at the same time, and there were an overnight sea change in American behavior, and men began to hold each other accountable in new ways, then yeah, it would be fine to allow insider trading. Probably a bad idea before that happens, though.
   23. Chicago Joe Posted: May 14, 2017 at 01:02 AM (#5455025)
But if the stock is already out there on the marketplace, it's not the company that is harmed by insider trading (they're not raising money from the exchange of shares) but other marketplace participants who don't have access to the same information.
   24. Cargo Cultist Posted: May 14, 2017 at 01:26 AM (#5455027)
Jesus.

Here, learn something. This is straight from the SEC:

"Illegal insider trading refers generally to buying or selling a security, in breach of a fiduciary duty or other relationship of trust and confidence, while in possession of material, nonpublic information about the security. Insider trading violations may also include "tipping" such information, securities trading by the person "tipped," and securities trading by those who misappropriate such information.

Examples of insider trading cases that have been brought by the SEC are cases against:

Corporate officers, directors, and employees who traded the corporation's securities after learning of significant, confidential corporate developments;
Friends, business associates, family members, and other "tippees" of such officers, directors, and employees, who traded the securities after receiving such information;
Employees of law, banking, brokerage and printing firms who were given such information to provide services to the corporation whose securities they traded;
Government employees who learned of such information because of their employment by the government; and
Other persons who misappropriated, and took advantage of, confidential information from their employers.
Because insider trading undermines investor confidence in the fairness and integrity of the securities markets, the SEC has treated the detection and prosecution of insider trading violations as one of its enforcement priorities."
   25. Man o' Schwar Posted: May 14, 2017 at 02:01 AM (#5455029)
I've reached the level at my job that on occasion I become privy to stuff that may or may not affect our stock price. You better believe I don't tell a soul about it. I generally won't say much more than "it's fine" when asked about work to anyone outside of the company. I know the SEC is serious about this stuff, and I don't want there to be any question about whether I raised an eyebrow or winked suggestively at someone who took it as a sign to pour his life savings into our stock right before it suddenly goes up (possibly for some reason I was wholly unaware of).

(This happened at my company. One of the executives came into possession of some knowledge about a drug that was going to be approved, and he told his wife. She told her brother, who sold everything he had and bought our stock. Shockingly, the SEC was able to trace that one back without too much trouble. The guy lost his job, and the brother went to jail. Now whenever something big, or even semi-big, is brewing, legal rounds us all up in a conference room and reminds us in their sternest legal voices that we're not supposed to say nothing to no one, capisce?).
   26. David Nieporent (now, with children) Posted: May 14, 2017 at 02:11 AM (#5455031)
But if the stock is already out there on the marketplace, it's not the company that is harmed by insider trading (they're not raising money from the exchange of shares) but other marketplace participants who don't have access to the same information.
There are information asymmetries in virtually every transaction, but that doesn't represent a harm. Each side gets what it bargained for.
   27. David Nieporent (now, with children) Posted: May 14, 2017 at 02:13 AM (#5455032)
I don't know who Cargo Cultist thinks he's explaining things to. I think we're all aware that the government prosecutes insider trading. But a bureaucracy explaining why the bureaucracy's efforts are so important may just not be the most unbiased source.
   28. David Nieporent (now, with children) Posted: May 14, 2017 at 02:15 AM (#5455033)
Perhaps if you were allowed to enact all of your other libertarian fantasies at the same time, and there were an overnight sea change in American behavior, and men began to hold each other accountable in new ways, then yeah, it would be fine to allow insider trading. Probably a bad idea before that happens, though.
Sorry, but I don't think this even rises to the level of ad hominem. I have no idea what you're trying to say (other than that you probably think insider trading should be illegal), or why there would need to be any changes in anything in order to eliminate this economically silly non-crime. Why would it be a bad idea?
   29. Joe Bivens, Floundering Pumpkin Posted: May 14, 2017 at 10:24 AM (#5455058)
Where do they draw the line, though? Mr. Smith receives insider knowledge of a merger about to happen that will cause the ABC company to rise. He tells his brother, who tells his golf buddy, who mentions it to the guys in his regular foursome, etc... Who's liable and who's not? At which point did it stop being insider trading and just become a hot stock tip?


Mr. Smith should keep his yap shut. At my company, our CoC prohibits us from talking about any proprietary info with anyone outside of the company. So while Mr. Smith's aside to his brother doesn't result in any trading by the brother, the inside information was used by someone, and that's not fair, or legal.

   30. BDC Posted: May 14, 2017 at 10:46 AM (#5455063)
Why would it be a bad idea?

Others know the specific issues far better, but the whole problem seems to me a case of a general paradox: the freer the market, the better; but the freer the market, the more corrupt it tends to be, and thus less free.

   31. snapper (history's 42nd greatest monster) Posted: May 14, 2017 at 11:12 AM (#5455068)
the freer the market, the better;

The freer the market the better is a conclusion from a very specific set of assumptions. The standard economic assumption set is an infinite number of small market participants each with equal information, and equal market power. To he extent these assumptions don't hold, the conclusion won't hold.

Monopoly is the classic example. A "free" (i.e. unregulated) market with only one seller is not remotely the best case outcome for the whole community. It leads to underproduction, excessively high prices, and the monopolist capturing all the consumer surplus.

Likewise, an unregulated market in securities where the insiders are allowed to trade on inside information is not really "free", in that non-insiders will know they are always at a disadvantage. This will lead to non-insiders withdrawing from the market, a decline in liquidity, and a fall in the value of all securities.

The owners of the company will be harmed because the executives are enriching themselves. It is far more efficient to police this at the general market level to instill confidence, than to leave it up to each individual company to enforce. Given what we know about board capture, and the cronyism rife at large corporations, no one would trust the corporations to act against their CEOs, CFOs, etc.
   32. Slivers of Maranville descends into chaos (SdeB) Posted: May 14, 2017 at 11:23 AM (#5455073)
Plus it's a classic tragedy of the commons situation. You could police your company with the strictest rules, but if another company in your same industry allows its execs to engage in insider trading, the loss in investor confidence will spill over to your company, and you'll suffer just as much.
   33. ReggieThomasLives Posted: May 14, 2017 at 11:24 AM (#5455075)
But if the stock is already out there on the marketplace, it's not the company that is harmed by insider trading (they're not raising money from the exchange of shares) but other marketplace participants who don't have access to the same information.


The argument is as follows. A company whose stock trades for $10 negotiates a sale at a $20 per share price. While this information is not public it continues to trade at $10 despite its actual value being close to $20.

Along cones Doug. He buys a big block, driving the price to $12. Everyone who would have sold that day benefits, they would have lost $10 in value but now only lose less than $8 in value. Doug helps make the market price come closer to its actual value, making the markets fairer.

Those who lose in the transaction are buyers who would have luckily bought shares for far less than they were worth, or had to pay up ecause of Doug, and sellers who never would have sold at $10 but decided to sell at $12. But the harm to someone missing out on accidental windfall or being forced to pay a fairer price isn't much harm at all. it's certainly not a societal harm, societal harm is inefficient pricing where buyers and sellers without inside information constantly get unfair prices.

Since what Doug did was beneficial to the market and society,, why is it a crime that society has to enforce? Let the company use its employee// contractor/partner agreements to punish the CEO and other leaking insiders in civil court. Don't spend my tax dollars chasing down the Dougs of the world.
   34. Joe Bivens, Floundering Pumpkin Posted: May 14, 2017 at 11:57 AM (#5455087)
Since what Doug did was beneficial to the market and society,, why is it a crime that society has to enforce? Let the company use its employee// contractor/partner agreements to punish the CEO and other leaking insiders in civil court. Don't spend my tax dollars chasing down the Dougs of the world.


Except that sometimes the "little guy" is acting as proxy for the source of the tip.
   35. Misirlou doesn't live in the restaurant Posted: May 14, 2017 at 12:37 PM (#5455100)
Likewise, an unregulated market in securities where the insiders are allowed to trade on inside information is not really "free", in that non-insiders will know they are always at a disadvantage. This will lead to non-insiders withdrawing from the market, a decline in liquidity, and a fall in the value of all securities.


This is so blatantly obvious that it's surprising some supposedly intelligent posters are arguing against it.
   36. Misirlou doesn't live in the restaurant Posted: May 14, 2017 at 12:45 PM (#5455101)
Since what Doug did was beneficial to the market and society,, why is it a crime that society has to enforce?


Because once it gets out that Doug was trading on inside information that few if any others had access to, nobody is going to consider Doug a free market hero, just another corrupt executive, and the more this happens, the more the market looks like a scam that only insiders can win, and people will stop investing and the system will collapse.
   37. David Nieporent (now, with children) Posted: May 14, 2017 at 01:59 PM (#5455111)
Likewise, an unregulated market in securities where the insiders are allowed to trade on inside information is not really "free", in that non-insiders will know they are always at a disadvantage. This will lead to non-insiders withdrawing from the market, a decline in liquidity, and a fall in the value of all securities
No. Look, you people keep begging the question by assuming that it's unfair, and then saying, "Well, it's unfair so it's bad."

Apple has hit $150 per share, so I want to sell because I have decided that it isn't going to go any higher, and that's a reasonable price. I sell it; virtually by definition, the person buying it thinks that it's going to go up in value.

Scenario A: Buyer knows less about computers than Harold Reynolds knows about sabermetrics, and has guessed wildly that Apple will go up.
Scenario B: Buyer is a sophisticated investor who has studied industry trends and market research and read everything ever published about Apple, and has decided that Apple is going to go up.
Scenario C: Buyer is an unrelated bystander that overheard a couple of Apple employees talking on the bus about the exciting new Apple flying car that is going to be released next week, and has concluded that Apple is going to go up.
Scenario D: Buyer lives next door to Tim Cook, and Tim Cook told him that Donald Trump is about to give Apple a trillion dollar government contract, and so knows that Apple is going to go up.

What difference does it make to me which of these scenarios (only one of which is illegal insider trading) is true? I decided that $150 was a fair price, and that's the price I got. In any of those scenarios, there's the possibility that I'm wrong and that Apple goes up further. But whether the buyer knows (or thinks he knows) differently or not doesn't change my side of that equation.
   38. What did Billy Ripken have against ElRoy Face? Posted: May 14, 2017 at 02:17 PM (#5455116)
What difference does it make to me which of these scenarios (only one of which is illegal insider trading) is true? I decided that $150 was a fair price, and that's the price I got. In any of those scenarios, there's the possibility that I'm wrong and that Apple goes up further. But whether the buyer knows (or thinks he knows) differently or not doesn't change my side of that equation.

Is this even a serious argument? It absolutely does change your side of the equation, or I suppose more accurately it 'should have' - if you had access to the information that the buyer had in Scenario D, you wouldn't have sold in the first place and would have reaped the benefit of the increase. Your decision that $150 is a fair price was based on incorrect/incomplete information, and you through no fault of your own were not able to make a fully informed choice.
   39. Fancy Pants with a clinging marmoset on his Handle Posted: May 14, 2017 at 02:32 PM (#5455118)
No. Look, you people keep begging the question by assuming that it's unfair, and then saying, "Well, it's unfair so it's bad."

Apple has hit $150 per share, so I want to sell because I have decided that it isn't going to go any higher, and that's a reasonable price. I sell it; virtually by definition, the person buying it thinks that it's going to go up in value.

Scenario A: Buyer knows less about computers than Harold Reynolds knows about sabermetrics, and has guessed wildly that Apple will go up.
Scenario B: Buyer is a sophisticated investor who has studied industry trends and market research and read everything ever published about Apple, and has decided that Apple is going to go up.
Scenario C: Buyer is an unrelated bystander that overheard a couple of Apple employees talking on the bus about the exciting new Apple flying car that is going to be released next week, and has concluded that Apple is going to go up.
Scenario D: Buyer lives next door to Tim Cook, and Tim Cook told him that Donald Trump is about to give Apple a trillion dollar government contract, and so knows that Apple is going to go up.

What difference does it make to me which of these scenarios (only one of which is illegal insider trading) is true? I decided that $150 was a fair price, and that's the price I got. In any of those scenarios, there's the possibility that I'm wrong and that Apple goes up further. But whether the buyer knows (or thinks he knows) differently or not doesn't change my side of that equation.

The problem is, under these conditions, you would be a sucker to be in the market to begin with.

If somebody is willing to sell you their shares to begin with, there is a good chance they have information that the bottom is going to drop out of them, and you will lose money. You would be an idiot to buy under these conditions.

Whenever you do decide to sell your shares, there is a good chance that the person buying them knows they are going to go up, so you would always be a sucker to sell them.

The odds of any move you make, will always be against you.

Trading shares is largely a zero sum game (yes there is growth, but that doesn't really effect the win / loss dynamic between the two trading: one person is going to win the trade, one is going to lose). If people are allowed to use insider information at will, it is like playing poker against people who know the order of the rest of the cards in the deck. If you aren't one of the people who get this look, why on earth would you buy into a game like that? You would be an idiot to do so.
   40. Ray (RDP) Posted: May 14, 2017 at 02:56 PM (#5455125)
Former All-Star Doug DeCinces was convicted Friday of insider trading for a stock buy that earned him more than $1 million.

The ex-Baltimore Orioles and Angels third baseman was convicted of 14 federal charges. According to the Orange County Register, each count potentially carries a maximum prison sentence of 20 years.

Jurors deadlocked on 18 other charges and a judge declared a mistrial for those counts, according to the U.S. attorney’s office.


Absurd that this not-a-crime has been criminalized, and despicable that as a society we would break up families by sending people such as DeCinces to prison over it.
   41. Ray (RDP) Posted: May 14, 2017 at 03:12 PM (#5455129)
The SEC has always pushed the bounds of what insider trading is, or is supposed to be. At one point they claimed you could be convicted of insider trading if you were on a plane landing in New York, looked out the window and saw IBM's main plant blow up in an explosion, and immediately called your broker to short IBM. The SEC has gotten it's wrist slapped on it's broad theories many times.


This was a fun one. Back in the '80s the SEC tried to prosecute Barry Switzer, the future Cowboys' coach (then the head coach at the University of Oklahoma) because Switzer traded on information he overheard the CEO of Texas International (George Platt, who Switzer knew casually) telling his wife while in the bleachers at a high school track meet their sons were in.

The court found that since Platt, though he may have been careless, didn't intentionally share the information with Switzer there was no breach of fiduciary duty and therefore Switzer couldn't be liable either.
   42. David Nieporent (now, with children) Posted: May 14, 2017 at 03:18 PM (#5455132)
Is this even a serious argument? It absolutely does change your side of the equation, or I suppose more accurately it 'should have' - if you had access to the information that the buyer had in Scenario D, you wouldn't have sold in the first place and would have reaped the benefit of the increase. Your decision that $150 is a fair price was based on incorrect/incomplete information, and you through no fault of your own were not able to make a fully informed choice.
One always makes decisions based on incomplete information. Apple had that government contract/flying car coming, whether or not person D knew it. My decision was based on the exact same information in scenarios A-C as in D. Why should the information possessed by the other side change my retroactive view of the transaction?
   43. BDC Posted: May 14, 2017 at 03:31 PM (#5455144)
Apple had that government contract/flying car coming, whether or not person D knew it. My decision was based on the exact same information in scenarios A-C as in D

"I'm going to throw you a changeup on the next pitch, based on my knowledge of your past hitting strengths, whether or not you've got a guy in CF feeding you my catcher's signs."

   44. What did Billy Ripken have against ElRoy Face? Posted: May 14, 2017 at 03:36 PM (#5455146)
Why should the information possessed by the other side change my retroactive view of the transaction?

Because you realize that an inequitable market deprived you of a benefit that you would have had if the market had been equitable. As Fancy Pants said, why would you want to participate in such a market? I find it hard to believe that you really don't get that.
   45. David Nieporent (now, with children) Posted: May 14, 2017 at 03:38 PM (#5455147)
Because you realize that an inequitable market deprived you of a benefit that you would have had if the market had been equitable.
You guys are really good at that begging the question thing. Simply calling it inequitable doesn't answer the question of how it's inequitable. Again, in each of the four scenarios described, I end up at exactly the same place. (EDIT: As does the buyer.)
   46. What did Billy Ripken have against ElRoy Face? Posted: May 14, 2017 at 03:44 PM (#5455149)
It's inequitable because the other person has information that you can't possibly have. Your only rebuttal of that is "one always makes decisions based on incomplete information." That's true to some extent, but it doesn't address the situation where one party has information that the other can't possibly have, and uses that info to gain a benefit that otherwise would have gone to the other party. What's your answer to Fancy Pants's question about the poker game?
   47. What did Billy Ripken have against ElRoy Face? Posted: May 14, 2017 at 03:47 PM (#5455151)
Again, in each of the four scenarios described, I end up at exactly the same place. (EDIT: As does the buyer.)

Right, because you didn't include the fifth scenario, which is that you have the information and don't sell. Then you're not in the same place.
   48. Slivers of Maranville descends into chaos (SdeB) Posted: May 14, 2017 at 03:49 PM (#5455152)
Again, in each of the four scenarios described, I end up at exactly the same place. (EDIT: As does the buyer.)


If the inside trader profits, and all other buyers and sellers end up at exactly the same place they would have otherwise, where does the profit come from?
   49. David Nieporent (now, with children) Posted: May 14, 2017 at 04:04 PM (#5455154)
Right, because you didn't include the fifth scenario, which is that you have the information and don't sell. Then you're not in the same place.
Because that's irrelevant to the issue. The information I have doesn't determine whether what he did was criminal; the information he has does. He's under no duty to provide information to me. (Indeed, if he said to me, before the transaction, "You know, Tim Cook told me that Apple is about to get a huge contract," that wouldn't make his action any less criminal.)

My whole point is that people view scenarios A-D differently even though both buyer and seller end up in the same place in all of them. ("It's unfair that you know more than me" is just an insane argument.)
   50. What did Billy Ripken have against ElRoy Face? Posted: May 14, 2017 at 04:10 PM (#5455158)
Well, if you're not even going to consider the result of an equitable market, i.e. one in which both parties have the same info, as a relevant possibility, it would seem that you're the one begging the question. And the argument is not "it's unfair that you know more than me." The argument is "it's unfair that you have information that I can't possibly access and use it to your benefit and my detriment." Still waiting for an answer about the poker game, BTW.
   51. David Nieporent (now, with children) Posted: May 14, 2017 at 04:23 PM (#5455169)
The poker argument is very revealing, in that it illustrates that people are thinking wrongly about the stock market. In poker, you're competing against the other guy. But when you sell stock, you're not competing with the buyer. (Or vice versa.)

And in fact the point of the poker contest -- or any bet, really -- is to see who do better from the same starting point. (The way to see that the poker scenario described above is completely nonanalogous is to note that if both parties knew the order of the cards, then the game would be "equitable"... but also pointless and stupid. Poker requires that both sides have little information, not merely that both sides have the same information.)
   52. Misirlou doesn't live in the restaurant Posted: May 14, 2017 at 04:32 PM (#5455179)
But when you sell stock, you're not competing with the buyer. (Or vice versa.)


Of course you are. The buyer is betting the stock will go up. The seller is betting it will go down, or has at least plateaued.
   53. snapper (history's 42nd greatest monster) Posted: May 14, 2017 at 04:42 PM (#5455187)
My whole point is that people view scenarios A-D differently even though both buyer and seller end up in the same place in all of them.

That's not true. The buyer offers $12 only because of his inside information. He was able to pay above the fair price because of this info.

If he hadn't acted, the sellers may well have keep their stock (they were willing to sell at $12, but not $10) and then enjoyed the windfall profit when it went to $20.

If the inside trader profits, and all other buyers and sellers end up at exactly the same place they would have otherwise, where does the profit come from?

Exactly. Some people have to have sold who otherwise wouldn't have. Those people are worse off.
   54. Misirlou doesn't live in the restaurant Posted: May 14, 2017 at 04:47 PM (#5455193)
Fancy Pants summed it up nicely in #39.

The problem is, under these conditions, you would be a sucker to be in the market to begin with.

If somebody is willing to sell you their shares to begin with, there is a good chance they have information that the bottom is going to drop out of them, and you will lose money. You would be an idiot to buy under these conditions.

Whenever you do decide to sell your shares, there is a good chance that the person buying them knows they are going to go up, so you would always be a sucker to sell them.

The odds of any move you make, will always be against you.


No more need be said. Anyone, including David would be a fool to participate in such a market. Since David is likely not a fool, one must conclude that he is merely trolling here.
   55. Dog on the sidewalk Posted: May 14, 2017 at 05:07 PM (#5455202)
Not trolling, just blinded by ideology :)

   56. David Nieporent (now, with children) Posted: May 14, 2017 at 05:12 PM (#5455204)
That's not true. The buyer offers $12 only because of his inside information. He was able to pay above the fair price because of this info.

If he hadn't acted, the sellers may well have keep their stock (they were willing to sell at $12, but not $10) and then enjoyed the windfall profit when it went to $20.
First, that doesn't even make sense. The buyer is offering $10 here, not $12. If he offered $12 when the market price is $10, that would be a sign to the buyer that something was up. Second, "I didn't get a windfall profit that I would have gotten if the market price were less accurate" is not a valid plaint.

Indeed, in actual contexts where your hypothetical might occur -- say, the purchase of real estate based on inside information -- we don't regard it as a crime or wrongdoing at all.
   57. PreservedFish Posted: May 14, 2017 at 05:24 PM (#5455209)
I may be wrong - after all, I'm not even a fake internet lawyer - but I suspect the the minor inequities inflicted on regular Joe Weekend Trader discussed in many comments above are less important than the profound opportunity for corruption that would result in a world without insider trading. There would be an overwhelming attraction for C-suiters and board members to do ridiculous things, at the likely expense of shareholders.
   58. Hysterical & Useless Posted: May 14, 2017 at 05:24 PM (#5455210)
The type of unregulated market proposed has already been tried, and found wanting. Before securities regulation began (Securities Act of 1933), the stock market was a much smaller fraction of the US and world economies than it is now, with a tiny fraction of the number of participants. The purpose of the market is to give companies a way to raise funds; a smaller market, with fewer potential buyers, makes it harder for companies to use the mechanism. The boom years of the Roaring 20s enticed small investors into the market; the Crash pretty much ended small investor participation for years (decades?).

Even if we were to grant, for the sake of argument, that insider trading is not inequitable, those who value positive results over ideological purity might be inclined to regard it as unproductive at best and actively detrimental to society at worst.

   59. What did Billy Ripken have against ElRoy Face? Posted: May 14, 2017 at 05:28 PM (#5455213)
actively detrimental to society at worst.

Well, first you're going to have to get the libertarians to admit that society exists.
   60. What did Billy Ripken have against ElRoy Face? Posted: May 14, 2017 at 05:29 PM (#5455216)
I may be wrong - after all, I'm not even a fake internet lawyer - but I suspect the the minor inequities inflicted on regular Joe Weekend Trader discussed in many comments above are less important than the profound opportunity for corruption that would result in a world without insider trading. There would be an overwhelming attraction for C-suiters and board members to do ridiculous things, at the likely expense of shareholders.

In fairness, I think even our doctrinaire libertarian friends have said they would allow shareholders to pursue remedies for breach of fiduciary duty in such situations.
   61. Hysterical & Useless Posted: May 14, 2017 at 05:30 PM (#5455217)
the profound opportunity for corruption that would result


Trollope explored this territory in a couple of his novels (best example probably The Way We Live Now), at a time when pretty much all stock trading was based on inside info. Print up a pretty (and imaginative) prospectus, pay a titled aristo to sit on the corporate board, sell as many shares as you can, pocket the proceeds when the company (sadly!) fails.
   62. David Nieporent (now, with children) Posted: May 14, 2017 at 05:32 PM (#5455218)
No more need be said. Anyone, including David would be a fool to participate in such a market. Since David is likely not a fool, one must conclude that he is merely trolling here.
No. There are a lot of economists, including Milton Friedman, who agree with me. (Or, rather, to put it less self-aggrandizingly, I agree with them.)
   63. What did Billy Ripken have against ElRoy Face? Posted: May 14, 2017 at 05:38 PM (#5455223)
There are a lot of economists, including Milton Friedman, who agree with me.

That's not exactly shocking given that Milton Friedman was a libertarian ideologue.
   64. BDC Posted: May 14, 2017 at 05:40 PM (#5455224)
Trollope explored this territory in a couple of his novels (best example probably The Way We Live Now)

An amazing novel, I am delighted to see it invoked here. The Great Railway to Vera Cruz is a wonderful invention.
   65. ReggieThomasLives Posted: May 14, 2017 at 05:44 PM (#5455228)
Trading shares is largely a zero sum game (yes there is growth, but that doesn't really effect the win / loss dynamic between the two trading: one person is going to win the trade, one is going to lose). If people are allowed to use insider information at will, it is like playing poker against people who know the order of the rest of the cards in the deck. If you aren't one of the people who get this look, why on earth would you buy into a game like that? You would be an idiot to do so.


Yea this isn't true, it's nothing like a poker game. A poker game is either zero or negative sum (if it's raked). Investing is an enormously positive sum game, it's averaged 8% or so returns over the long run. You can actually produce a high return with zero information by purchasing an index fund and holding it long enough!

Lots of people are confusing trading/speculation with investing. Trading is likely a negative sum game, even for wall street. Predicting price action is so difficult to be nearly impossible. And you are always at an informational disadvantage even with insider trading laws, every CEO is allowed to trade their stock with the only limit being the timing of when and disclosures they make, which is meant to give them immunity against prosecution.

When a CEO files their intent to buy or sell, you have no idea whether they are buying to trick the market into thinking good things are coming so the company can raise more funds from suckers, or being forced to sell to pay off a crippling debt that forced their hand. And most CEOs are sales people. If you know how to value a business, you probably know more than they do about the value of theirs, so why would you follow their lead?

The greatest stock market investor of all time did it with zero inside information, just reading annual reports to determine clear values and waiting for attractive prices. And those who sold to Buffett didn't "lose" the transaction. Maybe they used the funds to buy a better investment, or pay for their kids college, etc. We all can't hold investments for 50 years+ to maximize our returns.

Ban insider trading or not, most traders will still lose money. But allow it and investors as a class will have fairer, if not also better outcomes. And it's one less fake crime for our government to waste resources prosecuting.
   66. David Nieporent (now, with children) Posted: May 14, 2017 at 05:45 PM (#5455230)
That's not exactly shocking given that Milton Friedman was a libertarian ideologue.
Well, I am glad people here have no priors at all and just blindly worship regulation because it has proved so effective and useful.

(He was, of course, also a Nobel Prize-winning economist.)
   67. ReggieThomasLives Posted: May 14, 2017 at 05:50 PM (#5455232)
Trollope explored this territory in a couple of his novels (best example probably The Way We Live Now), at a time when pretty much all stock trading was based on inside info. Print up a pretty (and imaginative) prospectus, pay a titled aristo to sit on the corporate board, sell as many shares as you can, pocket the proceeds when the company (sadly!) fails.


This opportunity has always existed, still exists, and has nothing to do with insider trading.
   68. ReggieThomasLives Posted: May 14, 2017 at 05:53 PM (#5455236)
Plus it's a classic tragedy of the commons situation. You could police your company with the strictest rules, but if another company in your same industry allows its execs to engage in insider trading, the loss in investor confidence will spill over to your company, and you'll suffer just as much.


It's clearly not a tragedy of the commons. Investing is assessing risk, and less risky companies have cheaper access to financing than more risky do. The market is constantly making these determinations.
   69. Hysterical & Useless Posted: May 14, 2017 at 05:53 PM (#5455237)
Just wanted to get a Trollope reference in, he deserves as many mentions on this site as George multiple middle initials Martin.
   70. Hysterical & Useless Posted: May 14, 2017 at 05:55 PM (#5455239)
Well, first you're going to have to get the libertarians to admit that society exists.



The market is constantly making these determinations.


Interesting battle of abstractions....
   71. ReggieThomasLives Posted: May 14, 2017 at 06:01 PM (#5455241)
Because once it gets out that Doug was trading on inside information that few if any others had access to, nobody is going to consider Doug a free market hero, just another corrupt executive, and the more this happens, the more the market looks like a scam that only insiders can win, and people will stop investing and the system will collapse.


How does it feel to sell a stock for $10 only to have a $20 sale announced the next day? For many it feels like they got gamed, why wasn't it announced earlier, why did i get screwed?

Even with insider trading laws, they are enforced by the most ineffectual and backwards government agency in existence. The SEC actively lobbies to restrict investors from having any control over their investments, refuses to allow them to propose board slates even. That is a huge issue that is a big reason why CEO salaries and management compensation is so out of control, boards and execs have free reign to loot companies with SEC blessings.

Whether Doug Decinces is sent to prison for 100 years after already being fined $2.5M is of minuscule import to investors confidence on the market.
   72. Buck Coats Posted: May 14, 2017 at 06:59 PM (#5455263)
He was, of course, also a Nobel Prize-winning economist.


Well that's not really a thing, but I know what you mean.
   73. David Nieporent (now, with children) Posted: May 14, 2017 at 07:07 PM (#5455267)
Well that's not really a thing, but I know what you mean.
I refuse to write Nobel Memorial Prize-winning economist.
   74. Buck Coats Posted: May 14, 2017 at 07:57 PM (#5455278)
Yeah but I refuse to call Dan Shaughnessy a Hall-of-Famer
   75. PreservedFish Posted: May 14, 2017 at 08:24 PM (#5455299)
This thread is now about Trollope. I've never read a word of his, but he's been a subject of mild interest for me since high school. We had a substitute English teacher that was doing his PhD on Trollope, and he couldn't teach any other book author without making frequent references to Trollope - he kept a dog-eared copy of Trollope's autobiography by his side because he thought it was relevant to all discussions, I suppose. Judging from the cover art, and from how absurdly prolific he was, I always assumed that Trollope was the 19th century version of The Young and the Restless. But last year there was a big New Yorker Adam Gopnik article on how HOT Trollope is in English departments these days. Worth reading? Where do I start?
   76. BDC Posted: May 14, 2017 at 08:36 PM (#5455302)
Very much worth reading, Fish. You could start with The Way We Live Now, which H&U mentioned, and is probably his best. The Warden is the first of the long interconnected twelve-novel Barsetshire/Pallisers series, and it's short, so doesn't require that great an investment of time. Or you could jump into the middle of that series with Can You Forgive Her?

It may help if you already like Victorian novels, of course. But Trollope is less sentimental than Dickens, less serious than George Eliot, less melodramatic than the Brontës, and less cynical than Thackeray. He's a kind of low-maintenance long-Victorian-novelist :)
   77. Fancy Pants with a clinging marmoset on his Handle Posted: May 14, 2017 at 08:40 PM (#5455303)
You guys are really good at that begging the question thing. Simply calling it inequitable doesn't answer the question of how it's inequitable. Again, in each of the four scenarios described, I end up at exactly the same place.

Well no, because you have dramatically shifted supply and demand, without shifting price. That is the problem with these examples. You can't look at each individual deal in a vacuum. You have to look at deals that were either not available at all, or only available due to insider trading.

Say you don't have one stock, but 2 different ones, each selling for $10, that you want to cash out. One of them unbeknownst to you is going to double in value the next week the other is going to half in value. But these things ARE known to select people in the know. Absent insider trading, you cash out on both of them for $10 each. Or maybe you can't find buyers for either, and on average they are worth $12.50 to you a week later.

With insider trading, people are lining up to take the soon twice as valuable stock, while nobody wants to touch the doomed stock with a 10 foot pole. So you happily sell stock A, and are forced to sit on stock B until the market catches up to their real value. And as a result, you end up selling for an average of $7.50 instead.

That is how this does real harm to non-insiders.
   78. PreservedFish Posted: May 14, 2017 at 09:00 PM (#5455314)
But Trollope is less sentimental than Dickens,


Now that I've got you here I have a question on Dickens. I read Bleak House last year. I was really struck by the two alternating narrative voices. The omniscient narrator is an absolute triumph - confident, creative, almost as flamboyant as Joyce or Melville, impressive and wildly entertaining. But that narrator alternates with the heroine, in first-person, and to my modern eyes her story and her voice is twee and dull and silly and pat by contrast.

The heroine tells a story in which two or three upper class characters, consumed by sorrow and ennui, die. Like, they're so sad that they die. Typical pathetic romanticism, huh? But in the same damn book, in the omniscient narrator's chapters, you meet a woman living in squalor whose infant just died, and she declares that death was the best thing for him, because she never would have been able to protect him from the cycle of violence and self-loathing to which he was doomed in his station. It's realism/naturalism harrowing enough to easily fit in with the worst of Zola. It renders absurd the "white people problems" of the melancholy rich folks.

It's impressive that one writer is capable of both, but couldn't really understand the contrast. I don't know how to read the Esther Summerson chapters as anything but long-winded, mild parody ... was that his intention? And it makes me look back on other works, such as Oliver Twist, and think, what the ####? Why did he write such a silly neat ending if he's also capable of this jaw-dropping heart-breaking realism?
   79. Slivers of Maranville descends into chaos (SdeB) Posted: May 14, 2017 at 09:17 PM (#5455322)
It's clearly not a tragedy of the commons. Investing is assessing risk, and less risky companies have cheaper access to financing than more risky do. The market is constantly making these determinations.


If that were the case there would be no market corrections, because each company's risk would be assessed independently of the others. But in fact there is a strong mutual dependency, and a loss in confidence in one company can easily spread to others.
   80. ReggieThomasLives Posted: May 14, 2017 at 09:18 PM (#5455325)
With insider trading, people are lining up to take the soon twice as valuable stock, while nobody wants to touch the doomed stock with a 10 foot pole. So you happily sell stock A, and are forced to sit on stock B until the market catches up to their real value. And as a result, you end up selling for an average of $7.50 instead.


You are selfishly ignoring those who benefited from insider trading in your scenario. New buyers of stock B lose less money, and sellers of A make more money, and their improvement offsets your loss.

No one is saying insider trading magically benefits every market participant in every trade, only that it brings prices closer to their true value, making all transactions fairer. And a fairer market is better, especially for those without inside information.
   81. ReggieThomasLives Posted: May 14, 2017 at 09:22 PM (#5455329)
If that were the case there would be no market corrections, because each company's risk would be assessed independently of the others. But in fact there is a strong mutual dependency, and a loss in confidence in one company can easily spread to others.


And the market survives even massive corrections that shake investors confidence to their core. Intelligent investors rush in and take advantage and everyone learns the lesson again, for long term investors the stock market is one of the best investments you can ever make. Massive frauds like Enron don't kill the market, do how can allowing better information do it?
   82. Misirlou doesn't live in the restaurant Posted: May 14, 2017 at 09:28 PM (#5455331)
You are selfishly ignoring those who benefited from insider trading in your scenario.


And you are ignoring the people who will no longer participate in a market that allows insider trading, and how that will effect the overall returns.
   83. Fancy Pants with a clinging marmoset on his Handle Posted: May 14, 2017 at 09:34 PM (#5455335)
You are selfishly ignoring those who benefited from insider trading in your scenario.

Yes... the participants of insider trading mostly... That is the whole point. The trades are zero sum, even if investing itself isn't. So every time an "insider" profits from inside knowledge, it has to come at somebody's expense. And as a result, anybody who isn't an "insider" participating in such a system is a sucker.
   84. PreservedFish Posted: May 14, 2017 at 09:37 PM (#5455337)
In fairness, I think even our doctrinaire libertarian friends have said they would allow shareholders to pursue remedies for breach of fiduciary duty in such situations.


Are those like the remedies they pursue to push down insanely escalating CEO compensation?
   85. snapper (history's 42nd greatest monster) Posted: May 14, 2017 at 09:49 PM (#5455342)
Are those like the remedies they pursue to push down insanely escalating CEO compensation?

Yup. You just get the CEOs buddies on the board (who are also CEOs or former CEOs, or only have their cushy jobs b/c of the CEO) to sanction him.

Hahahahahahahahahahahahahahahahahahah!

Completely failed CEOs, who deserve to be fired on the spot for incompetence, and have their last 5 years of comp clawed back, walk away with $50M+ severance packages. There is no corporate governance in America. The inmates are running the asylum.
   86. PreservedFish Posted: May 14, 2017 at 10:17 PM (#5455355)
In fairness, I think even our doctrinaire libertarian friends have said they would allow shareholders to pursue remedies for breach of fiduciary duty in such situations.


Anyway, this gets back to my comment in #22 - the libertarian fantasy in which men actually do hold each other accountable in a way that obviates (and improves upon) government regulation. Doesn't seem to work that way in practice.
   87. ReggieThomasLives Posted: May 14, 2017 at 10:35 PM (#5455364)
Anyway, this gets back to my comment in #22 - the libertarian fantasy in which men actually do hold each other accountable in a way that obviates (and improves upon) government regulation. Doesn't seem to work that way in practice.


Yes, by SEC regulation public company shareholders aren't allowed to replace CEOs, or board members, or control exec compensation.

But it's "the market" that is responsible for egregious exec compensation.
   88. Slivers of Maranville descends into chaos (SdeB) Posted: May 14, 2017 at 11:20 PM (#5455369)
And the market survives even massive corrections that shake investors confidence to their core. Intelligent investors rush in and take advantage and everyone learns the lesson again, for long term investors the stock market is one of the best investments you can ever make.


That the market will eventually recover is of little comfort to the company who plays by the rules and sees its stock price suffer because a competitor plays insider trading games. It might work out in the long run, but in the long run we're all dead, as Keynes once said.
   89. Hysterical & Useless Posted: May 15, 2017 at 07:05 AM (#5455395)
PF, it's been a quarter century since I read Bleak House, but I do recall finding Esther Summerson...kind of an ick. Dickens, as you note, was capable of immensely powerful writing; at his best, he surges along, and the reader is carried on the wave. But he was also very much aware of, and subject to, the responses and whims of his public (the blessing and curse of monthly serialization, leading to such things as the two very different endings of Great Expectations).

Dickens had a very strong emotional commitment to reform; he wanted to see improvements in the lives of the poor and working class people with which England abounded, but at the same time he was strongly committed to the existing class structure, and his own position as a gentleman. His solution to the ills he saw was for people to treat each other better, but without changing the existing class structure.
   90. BDC Posted: May 15, 2017 at 11:01 AM (#5455476)
I re-read Bleak House not long ago: it used to be one of my favorites, though like both Fish and H&U, I was never taken with Esther Summerson. But this time through, Lady Dedlock's overwrought predicament bothered me even more. She doesn't even have the gumption to take arsenic or throw herself under a train (and she's done nothing wrong by comparison even to Emma Bovary or Anna Karenina). Or rather, Dickens doesn't allow her the gumption. Combine that with Esther's creepy engaged-to-your-guardian phase, and it's just too hung-up to be good overall, though I agree there's wonderful stuff in it.

Martin Chuzzlewit and Great Expectations remain my favorites by Dickens, and the first half of David Copperfield, at least. Our Mutual Friend is a lovely book, too. Most of the others I read only once and long ago.
   91. Never Give an Inge (Dave) Posted: May 15, 2017 at 11:10 AM (#5455485)

"That's nuts" isn't actually an argument. Yes, of course it should be legal. As I mentioned, to the extent it's a breach of fiduciary duty, that's between the company and the CEO, not a crime. The argument to the contrary is based on nothing more than some inchoate gut feeling that it's unfair.

To me, the main argument against insider trading is that it gives company (and other) insiders a big incentive to keep information secret until they have the opportunity to profit from it. The ban on insider trading gives them the incentive to get all material non-public information out there as soon as possible so that employees and executives can trade (which is important at least in the financial sector, where compensation is increasingly stock-based). Insider trading laws are important if you want information to flow freely in the market. I say this not based on a gut feeling, but from a couple of decades working in the securities industry.
   92. Traderdave Posted: May 15, 2017 at 01:20 PM (#5455624)
What got DeCinces caught was being a pig. TFA doesn't say it but other articles have described his activity as liquidating his entire portfolio and put the entire proceeds into Advanced Medical Optics. That's the insider trading equivalent of leaving your ID at the bank you just robbed.

When there is a big move in a security like that, the green visor guys start checking into it. People who had bought, say, 1000 shares, and have a history of investing in similar equities don't get noticed. People who load up on something well outside their normal pattern get popped.
Sometimes people will try to buy call options on a stock they've received a tip on. That's an even easier catch for the regulators.


De Cinces was both greedy AND stupid.
   93. LA Podcasting Hombre of Anaheim Posted: May 15, 2017 at 03:36 PM (#5455767)
(He was, of course, also a Nobel Prize-winning economist.)
Paul Krugman thanks you for acknowledging his brilliance.
   94. PreservedFish Posted: May 15, 2017 at 04:22 PM (#5455839)
Thanks for the responses on Dickens, gentlemen.
   95. Omineca Greg Posted: May 16, 2017 at 08:58 AM (#5456223)
His solution to the ills he saw was for people to treat each other better, but without changing the existing class structure.


I think class is one of the ways American Conservatism is different than the UK and Canadian brands. It's not easy for Americans to map their idea of Conservatism to those two countries and then make an accurate political analysis, as Toryism, while completely dedicated to a class structure, doesn't necessarily come with the same attitude towards the poor or other groups of people who are having a tough time succeeding.

Certainly, there are enough Tory scumbags around as to cloud the issue, but I think Americans have a hard time with the idea that it's possible to embrace a strongly ordered class structure, while at the same time having a deep social conscience. Indeed, there have been times on the Canadian political landscape, I'm thinking of the 70s, where the differences between our three parties had far less to do with policy decisions, and more to do with the nature of motivation in helping all Canadians. The NDP saw it as a class struggle, the Conservatives saw it as a necessity of having a smooth running society, with the Liberals in the middle. That's reductionist, but sorry, it's the best I can do.

The difference between Toryism in the UK and Canada has more to do with Canada's relative lack of competitors for Upper Class Twit Of The Year...

Scene: Sporting Field, in particular a running track. Five competitors run onto the pitch.

Good afternoon and welcome to Hurlingham Park. You join us just as the competitors are running out onto the field on this lovely winter's afternoon here, with the going firm underfoot and very little sign of rain. Well it certainly looks as though we're in for a splendid afternoon's sport in this the 127th Upperclass Twit of the Year Show. Well the competitors will be off in a moment so let me just identify for you.
(close-up of the competitors)

Vivian Smith-Smythe-Smith has an O-level in chemo-hygiene. Simon-Zinc-Trumpet-Harris, married to a very attractive table lamp. Nigel Incubator-Jones, his best friend is a tree, and in his spare time he's a stockbroker. Gervaise Brook-Hampster is in the Guards, and his father uses him as a wastepaper basket. And finally Oliver St John-Mollusc, Harrow and the Guards, thought by many to be this year's outstanding twit. Now they're moving up to the starting line, there's a jolly good crowd here today. Now they're under starter's orders ... and they're off!
(the starter fires the gun; nobody moves)

Ah no, they're not. No they didn't realize they were supposed to start. Never mind, we'll soon sort that out, the judge is explaining it to them now. I think Nigel and Gervaise have got the idea. All set to go.
(starter fires gun again; the twits move off erratically)

Oh, and they're off and it's a fast start this year. Oliver St John-Mollusc running a bit wide there and now they're coming into their first test, the straight line.
(the twits make their way erratically along five white lines)

They've got to walk along this straight line without failing over and Oliver's over at the back there, er, Simon's coming through quite fast on the outside, I think Simon and Nigel, both of them coming through very fast. There's Nigel there. No. Three, I'm sorry, and on the outside there's Gervaise coming through just out of shot and now, the position...
(the twits approach a line of matchboxes piled three high)

Simon and Vivian at the front coming to the matchbox jump.. three layers of matchboxes to clear... and Simon's over and Vivian's over beautifully, oh and the jump of a lifetime - if only his father could understand. Here's Nigel ... and now Gervaise is over he's, er, Nigel is over, and it's Gervaise, Gervaise is going to jump it, is it, no he's jumped the wrong way, there he goes, Nigel's over, beautifully. Now it's only Oliver. Oliver ... and Gervaise... oh bad luck. And now it's Kicking the Beggar.
(the twits are kicking a beggar with a vending tray)

Simon's there and he's putting the boot in, and not terribly hard, but he's going down and Simon can move on. Now Vivian's there. Vivian is there and waiting for a chance. Here he comes, oh a piledriver, a real piledriver, and now Simon's on No. l, Vivian 2, Nigel 3, Gervaise on 4 and Oliver bringing up the rear. Ah there's Oliver
(Oliver is still trying to jump the matchboxes)

There's Oliver now, he's at the back. I think he's having a little trouble with his old brain injury, he's going to have a go, no, no, bad luck, he's up, he doesn't know when he's beaten, this boy, he doesn't know when he's winning either. He doesn't have any sort of sensory apparatus. Oh there's Gervaise
(He is still kicking the beggar)

And he's putting the boot in there and he's got the beggar down and the steward's giving him a little bit of advice, yes, he can move on now, he can move on to the Hunt Photograph. He's off, Gervaise is there and Oliver's still at the back having trouble with the matchboxes.
(the twits approach a table with two attractive girls and a photographer)

Now here's the Hunt Ball Photograph and the first here's Simon, he's going to enjoy a joke with Lady Arabella Plunkett. She hopes to go into films, and Vivian's through there and, er, Nigel's there enjoying a joke with Lady Sarah Pencil Farthing Vivian Streamroller Adams Pie Biscuit Aftershave Gore Stringbottom Smith.
(shot of twit in a sports car reversing into cut-out of old woman)

And there's, there's Simon now in the sports car, he's reversed into the old woman, he's caught her absolutely beautifully. Now he's going to accelerate forward there to wake up the neighbor. There's Vivian I think, no Vivian's lost his keys, no there's Vivian, he's got the old woman, slowly but surely right in the midriff, and here he is. Here he is to wake up the neighbor now.
(a man in bed in the middle of the pitch; twit slams car door repeatedly)

Simon right in the lead, comfortably in the lead, but he can't get this neighbor woken up. He's slamming away there as best he can. He's getting absolutely no reaction at all. There, he's woken him up and Simon's through. Here comes Vivian, Vivian to slam the door, and there we are back at the Hunt Ball, I think that's Gervaise there, that's Gervaise going through there, and here, here comes Oliver, brave Oliver. Is he going to make it to the table, no I don't think he is, yes he is,
(Oliver falls over the table)

He did it, ohh. And the crowd are rising to him there, and there I can see, who is that there, yes that's Nigel, Nigel has woken the neighbor - my God this is exciting. Nigel's got very excited and he's going through and here comes Gervaise. Gervaise, oh no this is, er, out in the front there is Simon who is supposed to insult the waiter and he's forgotten.
(Simon runs past a waiter standing with a tray)

And Oliver has run himself over,
(Oliver lying in front of car)

What a great twit! And now here comes Vivian, Vivian to insult the waiter, and he is heaping abuse on him, and he is humiliating him, there and he's gone into the lead. Simon's not with him, no Vivian's in front of him at the bar.
(the twits each have several goes at getting under a bar of wood five feet off the ground)

Simon's got to get under this bar and this is extremely difficult as it requires absolutely expert co-ordination between mind and body. No Vivian isn't there. Here we go again and Simon's fallen backwards. Here's Nigel, he's tripped, Nigel has tripped, and he's under and Simon fails again, er, here is Gervaise, and Simon is through by accident. Here's Gervaise to be the last one over, there we are, here's Nigel right at the head of the field,
(the twits approach five rabbits staked out on the ground; they fire at them with shotguns)

And now he's going to shoot the rabbit, and these rabbits have been tied to the ground, and they're going to be a bit frisky, and this is only a one-day event. And they're blazing away there. They're not getting quite the results that they might, Gervaise is in there trying to bash it to death with the butt of his rifle, and I think Nigel's in there with his bare hands, but they're not getting the results that they might, but it is a little bit misty today and they must be shooting from a range of at least one foot. But they've had a couple of hits there I think, yes, they've had a couple of hits, and the whole field is up again and here they are.
(they approach a line of shop window dummies each wearing only a bra)

They're coming up to the debs, Gervaise first, Vivian second, Simon third. And now they've got to take the bras off from the front, this is really difficult, this is really the most, the most difficult part of the entire competition, and they're having a bit of trouble in there I think, they're really trying now and the crowd is getting excited, and I think some of the twits are getting rather excited too.
(the twits are wreaking havoc on the dummies)

Vivian is there, Vivian is coming through, Simon's in second place, and, no there's Oliver, he's not necessarily out of it. There goes Nigel, no he's lost something, and Gervaise running through to this final obstacle.
(they approach a table with five revolvers laid out on it)

Now all they have to do here to win the title is to shoot themselves. Simon has a shot. Bad luck, he misses. Nigel misses. Now there's Gervaise, and Gervaise has shot himself - Gervaise is Upperclass Twit of the Year. There's Nigel, he's shot Simon by mistake, Simon is back up and there's Nigel, Nigel's shot himself: Nigel is third in this fine and most exciting Upperclass Twit of the Year Show I've ever seen. Nigel's clubbed himself into fourth place.
(three coffins on stand with medals)

And so the final result:
The Upperclass Twit of the Year - Gervaise Brook-Hampster.
Runner up - Vivian Smith-Smythe-Smith
Third - Nigel Incubator-Jones
Well there'll certainly be some car door slamming in the streets of Kensington tonight.

Monty Python


But certainly, we have a few.

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