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Former Dell Execs Involved In Massive Insider Trading Probe 149

Posted by Soulskill
from the dude-you're-gettin'-a-cell dept.
DMandPenfold writes "Two former Dell employees, including a former investor relations manager, were part of a $62 million record-breaking insider trading scam, involving the company's shares as well as Nvidia stock, according to the FBI. The news comes as the U.S. authorities step up their pursuit of inside traders. Two months ago, Galleon hedge fund founder Raj Rajaratnam was sentenced to 11 years in jail for his role in a scam involving AMD, IBM and 3Com stock. Yesterday, Sandeep Goyal, an employee at Dell's U.S. headquarters between 2006 and 2007 before becoming a financial analyst, was arrested. An unnamed co-conspirator in Dell's investor relations department from 2007 to 2009 is also alleged to have been part of the scam. ... Goyal allegedly made $175,000 by providing inside information about Dell to a hedge fund. He has pleaded guilty to charges of securities fraud."
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Former Dell Execs Involved In Massive Insider Trading Probe

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  • And yet... (Score:4, Insightful)

    by Cornwallis (1188489) on Friday January 20, 2012 @01:29PM (#38763686)

    and yet... John Corzine is still walking the streets.

  • at this rate ... (Score:4, Insightful)

    by peter303 (12292) on Friday January 20, 2012 @01:30PM (#38763710)
    They might be able to start softball team of convicted inside traders at Fed Med by the end of the decade. its something everyone knows is happening, but almost no one gets caught.
  • Re:And yet... (Score:3, Insightful)

    by NikeHerc (694644) on Friday January 20, 2012 @01:41PM (#38763910)
    and yet... John Corzine is still walking the streets.

    So is Nancy Pelosi and a lot of other senators and congressmen. Does anyone think they should be immune from arrest due to insider trading?
  • by iONiUM (530420) on Friday January 20, 2012 @01:42PM (#38763940) Homepage Journal

    Yesterday Google announced earnings. At 4:01pm EST, exactly. I was able to get the page at 4:01:05pm EST, and just as a joke at the exact same time I checked out after hours trading on GOOG. It was already down 8%, though 5 minutes earlier it was holding around even on close. Tell me, how anyone was able to parse that document in 4 seconds, place the trade, and have it go through after hours.

    The system is already so corrupt and broken that anybody who isn't on the "in" shouldn't ever try to invest except for extreme long term. I don't know why a case like this would surprise anyone.

  • by turbidostato (878842) on Friday January 20, 2012 @01:43PM (#38763948)

    Truly free market, you say? Last I looked, one of the conditions for a "truly free market" was perfect knowledge for all the parties. Quite the opposite to "inside knowledge".

  • Re:And yet... (Score:3, Insightful)

    by HerculesMO (693085) on Friday January 20, 2012 @01:49PM (#38764076)

    You fail to get the point.. read about MF Global and what Corzine did there.

  • by chrb (1083577) on Friday January 20, 2012 @01:50PM (#38764086)
    My understanding is that the majority of libertarians would say: no, insider trading should not be a crime, as it does not involve the use of force. Government should exist to protect citizens from being deprived of life and property by force, and therefore the criminal statutes should reflect that. At worst insider trading would be a contractual violation, and hence subject to a civil court case. And if you have not signed a contract prohibiting insider trading, then an insider would have freedom to act as they wish. Some would go further and argue that insider trading is actually a good thing, as it lets outsiders gain some insight as to what is actually going on inside a company, ie. in itself, insider trading it is a form of information sharing that communicates useful information to people outwith the company.
  • by Kenja (541830) on Friday January 20, 2012 @01:58PM (#38764206)
    A better question would be, if corporations are people, wouldn't buying stocks violate the 13th amendment abolishing slavery?
  • Re:And yet... (Score:0, Insightful)

    by Anonymous Coward on Friday January 20, 2012 @02:10PM (#38764408)

    Duh, they write the laws.

  • by Kenja (541830) on Friday January 20, 2012 @02:13PM (#38764476)
    For much the same reason they get free health care from the government and yet fight against the rest of us getting it.
  • Re:And yet... (Score:5, Insightful)

    by hoggoth (414195) on Friday January 20, 2012 @02:19PM (#38764626) Journal

    Mod this up. Congress doesn't even try to hide their corruption these days.

    And this is how SOPA/PIPA will play out: A new version will be introduced just after the elections that includes exemptions/protection for the big players like Google and Facebook. This version will be passed no matter how much "the people" scream, as long as congressional donations aren't in jeopardy.

  • Re:And yet... (Score:5, Insightful)

    by alexander_686 (957440) on Friday January 20, 2012 @02:30PM (#38764872)

    The short answer is no.

    The trick here is that a representative’s knowledge of pending legislation, regulatory actions, etc. (i.e. knowledge from his day job) is technically not insider information – which of course if big enough to drive a very large truck though.

    So congressmen can still be charged with insider trading if they got their knowledge outside of their day job Congressmen have been prosecuted when outsiders have bribed them with inside information (less paper trail then giving them money) but it’s been rare.

  • by roman_mir (125474) on Friday January 20, 2012 @04:18PM (#38766730) Homepage Journal

    Real insider trading is done in government, before it releases a law or decision upon a company's future (like knowing whether FDA will deny or allow a new drug to the market), and Senators / Congressmen being bribed in stock options where straight up cash would be considered an illegal bribe, because they voted themselves this little neat trick.

    Insider trading idea is a bunch of crap. The only problem is FRAUD, all other trading that is done privately is done based on some form of information.

    For a top manager to bet against his company and then tank the stock by doing something that would undermine the company's value is FRAUD.

    For a top manager to bet against his company because he THINKS that the company is going in the wrong direction - that's not fraud, that's common sense.

    For a government official to accept a bribe in form of a stock option or to short stock of a company before passing a LAW that would hurt that company financially - that is REAL insider trading fraud.

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