Former Dell Execs Involved In Massive Insider Trading Probe 149
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."
Did pay off the right people? (Score:5, Interesting)
See Quest's CEO as an example. He refused to allow the NSA to spy on Quest's customers and suddenly he is in jail for "insider trading." Opps.
Re:Libertarianism and insider trading (Score:4, Interesting)
It doesn't strike me as being an easy thing, either way; on the one hand, it's a kind of fraud, which is one of the legitimate reasons for having a government (institutionalized and monopolized force). On the other, information is always diffused and imperfect in any market, so arresting and incarcerating people for not providing it is not likely to work well if only for political reasons (Google Harry Markopolos for an example of why). In that sense, the SEC gives people a false sense of security that the government is doing some aspect of due diligence for them that is not in reality happening.
Re:Insider.. it's all insider.. (Score:5, Interesting)
It's possible due to automated trading. If Google reported that their earnings were lower than expected even if only a small amount that could lead to some automated selling. That wouldn't require an analyst to read the report and decipher it before making a decision to sell/buy/hold.
Re:Meh (Score:3, Interesting)
Meanwhile, lots of ordinary people can barely afford to get by these days. If I were in charge of a company and earning several million a year, I would sacrifice my personal income for the year and give it to the people working for me instead. They need it more. If you need millions rolling in each year to maintain your lifestyle, you're doing something wrong.
Re:How dare they make information public too soon! (Score:4, Interesting)
This affects things such as rational pricing of goods, as well as supply and demand. Insider trading is also a momentary arbitrage. While there is nothing inherently wrong with arbitrage, those privy to the information are those that get to take advantage of it while the non-informed parties will suffer. This is not conducive to a true free market.