Key insights
- The post discusses the difficulty in detecting insider trading, particularly when information is shared discreetly. It questions the effectiveness of current surveillance methods and suggests that many instances may go undetected due to the challenges in proving the source and nature of the information used for trading. This could lead to a slight negative sentiment as it questions market fairness.
Dumb question of the day. How is insider trading actually caught? Example: a government employee tells a friend of potential legislation. Let’s say at a lunch where no phone call etc-
How is stuff like this prevented? I know if an usual # of trades occur in say a general location/ etc, it can be looked into etc (don’t know exact details) but it seems like insider trading would be easy to occur without any negative risk for the person acting on non public knowledge. I guess I just wonder how we don’t hear more about insider trading cases bc I’m sure it’s blatantly obvious in some cases but also can be easy to miss unless very odd scenario- aka Joe x buys $100k-500k in a stock and doesn’t make trades often. Maybe his average trade is 50k or less.