In Depth: FBI Says Hedge Fund Analyst Made Millions Through Insider Trading Nov 25 2014 | 7:12am ET By Neil Weinberg, David Glovin and Patricia Hurtado (Bloomberg) -- The FBI files spell it out: An analyst at Citadel LLC, the hedge fund with $23 billion in capital invested globally, told agents he made millions of dollars trading on information from a company insider. It was December 2011, and the Justice Department was deep into a seven-year investigation into illegal stock tips. As authorities homed in on people at several other hedge funds over leaks from a Dell Inc. employee, agents at the Federal Bureau of Investigation began questioning the Citadel analyst about the friendship he formed with the same Dell insider. In confidential FBI reports summarizing those interviews, agents recounted how the Citadel analyst received market- sensitive information from the Dell employee in 2008 and 2009. In one trade he told agents he made, the analyst bet against Dell after learning it would announce disappointing earnings, bringing in $5 million to $6 million when the company’s shares fell by more than 10 percent. He told agents he later discarded records. The analyst discussed helping the Dell employee hunt for a Wall Street job, the agents wrote. “It became an ‘I’ll scratch your back if you scratch mine’” relationship, they wrote in a summary of a Jan. 4, 2012, interview with the Citadel analyst. Nine people at five investment firms were eventually convicted in part for trading on tips from inside Dell. Neither the analyst, Richard Farmer, nor the Dell employee, Rob Ray, was sued by regulators or prosecuted. Chicago-based Citadel hasn’t been accused of wrongdoing. http://www.finalternatives.com/node/29121
I don't know why I absolutely hate reading about places where big trading whales should be, into insider trading probes. May be the disappointment, I don't know.
It's pretty clear by now that any trading entity that becomes too big (Citadel, SAC, banks) will start to abuse their power which comes easily with their size. Makes me think people who insist on judging the practices of these places more harshly and having different standards for them have been right. No wonder many people nowadays say "oh, you're a scammer" (with a smirk) when you mention anything related to trading.
when you have insider information, you can paint the tape and change the chart so retail jokers buy and sell at "false signals". i think almost every stock is manipulated, and it is the sheep that will suffer. Steal and rob, make zillions, get fined a few dollars, and retire at 30. just remember the next time your TA magic doesn't work...you just got played.
It's not just TA, it's any participant who isn't in the inner circle. I'm starting to think the extreme ways of dealing with theft (what this is) should be instituted. I think if you'd lose a hand over insider trading, you'd think twice.
wow!!!! that is really extreme ways. I wonder if it was possible, once an insider trading thing has been revealed for all those who traded then to join a class action lawsuit and get at leat 1000 times each loss during the time window of the trade. I mean they are trying ( actually doing) to stuff other traders, why not the other traders make a killing out of it.
That would be great in a democratic world. The reality is, once you're big enough, you can get away with almost anything with the right connections and as long as you didn't piss off anyone more powerful than yourself. Just look at Cohen and SAC capital, sure, the little guys in the company get the severe treatment while the bosses, who benefited most, walk away free.
I used to believe that some people were "untouchable". Now I do not believe so. The only reason some people get away with things, is the people involved in a ceratin way let them get away with things. Regarding Cohen : if I remember well, all his employees were willing to sell themselves for him. I hope for them that they are to receive a massive payout from Cohen. Though, I know some people who sell themselves short.
How do we know the real story. Maybe USA is making money, while foreigners are losing more. Perhaps a stock, market, etc...is manipulated so some country loses hundreds of millions as USA prospers. So what if a bunch of retail Americans get their account blown up. Like war, sacrifice tons of the sheep as the generals look at the bigger picture. So, if so, no sentencing....give them more money for being a good American and manipulating the system allowed to be manipulated. Then when the countries complain, we do a big time investigation and find nothing out of the ordinary.