←back to thread

Insider trade on Splunk acquisition?

(twitter.com)
417 points mkmk | 2 comments | 21 Sep 23 15:58 UTC | HN request time: 0.425s | source
Show context
lacoolj ◴[21 Sep 23 17:23 UTC] No.37600881[source]▶
Let's assume this turns out to be insider trading. Can someone shed a little insight on why this is worthy of a prison sentence?

To me, even if they used information they had and we didn't, I don't see who the "victim" of this crime would be. It truly sounds like a "but it's unfair" argument and I'd really like to know why I'm wrong here.

Thanks in advance

replies(12): >>37600905 #>>37600910 #>>37600921 #>>37600927 #>>37600966 #>>37601021 #>>37601049 #>>37601190 #>>37601265 #>>37601287 #>>37601388 #>>37602632 #
baq ◴[21 Sep 23 17:26 UTC] No.37600927[source]▶
Fair markets are efficient markets. Regulators try to keep the markets fair and efficient. If a market is unfair, participants are scared away, which leads to more inefficiency and potentially a collapse of the market.
replies(2): >>37602356 #>>37602530 #
zeroonetwothree ◴[21 Sep 23 18:59 UTC] No.37602356[source]▶
Insider trading also makes markets more efficient. So I don’t think your argument is as strong as you think.

I also think it’s weird we don’t apply this consistently. I can buy many assets with “non public information”, just not those the SEC regulates. So it’s not really about markets at all, but specifically about fairness for shareholders (or something by like that?)

replies(1): >>37602450 #
1. baq ◴[21 Sep 23 19:04 UTC] No.37602450[source]▶
It is by definition not efficient because some participants have more information available to them than others.
replies(1): >>37602598 #
2. fsckboy ◴[21 Sep 23 19:13 UTC] No.37602598[source]▶
the "secret" about the pending acquisition is what makes the market inefficient. Trading based on the secret information does integrate that asymmetric information into the price creating better price efficiency.