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Insider trade on Splunk acquisition?

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417 points mkmk | 1 comments | 21 Sep 23 15:58 UTC | HN request time: 0.602s | source
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xyzelement ◴[21 Sep 23 16:54 UTC] No.37600439[source]▶
I don't know if this is genuinely suspicious or not. Is buying 20K of options an unusual thing? Or is this something that happens regularly with options expiring worthless or with a small gain - and it just happened to hit big this time?

IE "someone bought a lottery ticket and won" - interesting to know if they play the lottery every other day (and don't usually win?)

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dtnewman ◴[21 Sep 23 17:02 UTC] No.37600565[source]▶
It's definitely suspicious and will probably be looked into. If it turns out it's a trader who regularly buys soon-to-be-expiring option calls, maybe it'll fly. But if the trade was made by someone who doesn't regularly make $20,000 options bets, they will need a good explanation.
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frontman1988 ◴[21 Sep 23 18:08 UTC] No.37601552[source]▶
Why will they need a good explanation? Can't they just say I lucked out and the burden of proving insider trading would fall on the SEC? Innocent until proven guilty right?
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1. mason55 ◴[21 Sep 23 18:23 UTC] No.37601777[source]▶
Yes, if the SEC chooses to refer to the US Attorney then the gov't will need to prove to a jury that insider trading occurred.

But, to start, the SEC will just come knocking and asking questions. If you have a good explanation then they'll go away. But if you don't then they'll keep digging, get warrants, etc.

If it's some random hedge fund that makes these bets all the time then the SEC will probably go away. If it's a broke old lady who opened her brokerage account a week ago then it's pretty clear what's going on, and they'll have the tools they need to turn the screws and get to the bottom of it. And if it's someone whose wife works in Cisco M&A then it'll be pretty open and shut because these kinds of mergers keep track of who had access to what info, for exactly this reason.