This will not be a popular opinion, but just to give my random 2 cents.
I theorize that the best way to solve the fairness issue of insider trading is to make it legal, but incredibly transparent. There is no way to catch the overwhelming majority of the actual insider trading that happens short of a dystopian SEC that continuously monitors everybody's phone calls, movements, emails, and all of their finances or just banning employees of publicly traded corporations from investing in their hard work, which also seems unfair.
The best way to benefit the public is for price speculation by insiders to be telegraphed either in real-time, or preferably with advance notice, to any member of the public.
If Joe Sixpack working at Apple wants to buy or sell stock or options the day before earnings (or any other day) based on some knowledge he has, I'd say it should be legal. He should just have to report that intent to some SEC website. Any member of the public should be able to go to some well-designed SEC website the day before and see that Joe along with 465 other employees plan to buy XXXX calls. If insiders want to trade in publicly traded companies, people should be able to have data on that to notice patterns and benefit from this information. If they decide they want to sell some stock, that should be reported at least in real time, or preferably with at least 1 day notice. If the goal is to benefit the greater public, the information should be designed to flow to the public.
This pre-knowledge of their trades is the rule I especially want to impose on the corrupt legislators, some of whom are known as suspiciously good traders for senile old people. The rules that they can wait 30 days before disclosing their deals are BS. They should be reported at least in real-time, or preferably at least a day before. This seems like a small price to pay for making the rules that pick the winners and losers in the marketplace, as well as the overall direction of the economy.
This is basically no change to the current system as it depends on honesty.
Now, it is "Don't do this and be honest about it"
You propose "Do this, and be honest about it"
I mean, if you weren't being honest before, I highly doubt you'd be honest now. It'll be like buying a used car at that point. All the seller has to do is lie, which will be easy if there are only 5 people in the company that knows of its doom. It isn't like they are going to talk to the buyer personally, either.
Yeah. It also does nothing to solve an insider sharing nonpublic information with a third party investor (with whom he/she then in some way share the profit made by trade).
I mean, it does. Because why bother if you can do the trades on your own account and share nothing?
If your trading broadcasts information moving the share price in the direction you're predicting... that's better for you. It's giving every insider a micro Buffet effect to their trades. Why in Gods name would they not use it?
Original comment suggest making insider trading transparent, by sharing insider trades in real-time or even with at least 1 day advance notice. So, there is data being shared. Outsourcing trades to a 3rd party would circumvent that data sharing (assuming insider trade reporting is automatic).
I mean, sure the advance notice version is bad and you just cheat the same way you do now. But if you just have to declare your trades immediately with a tag... there is no reason at all to hide that?
I completely agree that making insiders' trade public and real time (so it's legal to trade with insider info) makes a lot of sense. Information asymmetry is the problem with insider trading, which is solvable by making this info public via the trade action, and not the idea that some people are advantaged via insider info (i don't care if such and such senator or exec gets a good trade using insider info - i care that the info is late to the market and the public can't know it in time).
However, there's still one aspect which cannot be captured by such a transparent info source - the change of heart; i.e., if an insider were going to sell, but hears private insider news that makes it good to "keep" the stock, this info doesn't flow out. Inaction is also an important piece of insider info which insiders "act" on.
I suppose if the good news makes the previously intended sale not happen, it _should_ theoretically also make the insider want to buy more (subject to cash i guess). So hopefully, such insider "inaction" doesn't happen very often.
You don't necessarily need a programmable cryptocurrency to accomplish this, but think in terms of what's possible with smart contracts. If condition X is met, then take action Y.
Insider trades could be locked in with some form of conditional logic. If price goes over X on this date, then sell. If price goes under X on this date, then buy. Etc.
What about if the trader had to disclose the trade but also give conditions under which it would happen (to protect the trader from changes in the market), e.g. they could say to buy only if the price is within a certain range. The trade would be locked in from that point.
> He should just have to report that intent to some SEC website.
And how would you enforce that?
Even if you could, without the dystopian SEC that you fear, it would still be unfair if in real-time. With advance notice, it'd be completely gameable:
1. Musk advertises his intent to buy TWTR
2. Public reacts
3. Musk sells, but doesn't follow through on the buy.
I'm surprised it's not a popular opinion. It seems to fit well with libertarian/laissez-faire ideology.
If it was legal, retail might better understand that they're less knowledgable about a stock than the insiders. Instead we have the compromise where retail believes insider trading doesn't happen but it's actually rampant and retail are the least likely to benefit from it.
"Blue" about SOME social issues, extremely right-wing libertarian regarding other topics like economics, foreign policy and the environment. It is pretty much aligned with mainstream Democrats so at the end you are correct.
Very much so, yes. Anarcho-capitalist is the prevailing economic inclination of most people on HN. On the social scale, it seems more evenly split between progressive, conservative, with some reactionaries here and there.
Mapping that on the stupid US blue vs red scale is downright impossible.
> Anarcho-capitalist is the prevailing economic inclination of most people on HN.
Most people? What?
You're entitled to any perception of reality that you want, but I find it hard to believe that anybody can genuinely perceive ancaps to be the prevailing economic opinion here.
Well that's just the impression i get, it's not like we can have actual data on the matter.
But every discussion I've seen where economics have been brought up, anti-regulation, pro-business, "free market will fix everything", "all the problems come from the regulation and because it's not a true free market" opinions seem to be the majority. Regardless of the topic - be it environmental regulations, monetary policies, the amount of work required to open a restaurant, EU regulatory work against Bit Tech or other oligopolies, etc.
I'm not sure they are the majority opinion but I agree they are common. It's not surprising given the number of CEOs and venture capitalists on the site.
This adresses the problem partially. The insider often doesn't trade the stocks of their corporation, instead they tip others to trade it. There are networks of C-execs constantly tipping each other.
I feel like religiously throw those guys in prison when you catch them and ban them for life from trading paper, working in the finance industry, or serving as a corporate officer is what you aught to to.
Much better than the current, the stockholders will pay protection to the Feds to keep corporate offices from going to prison or facing any other repercussions.
This is the popular libertarian opinion and it is half thought out and wrong, like most libertarian opinions.
Say you are not an insider. Most investors in the public markets are not insiders. If a company wanted to be owned by insiders only it would never need to enter the public market. So say you, like most investors are considering stock where you are not an insider. Would you buy stock from an insider? Even if he properly discloses he is an insider. Is he selling because he needs the money to buy a new house or because he knows that something happened and the company is doomed. It does not feel very comfortable does it. So most investors would not feel safe and comfortable buying most stocks. So, good job, you just removed 90% of demand of stocks.
What people do not understand is that the american public markets are very unique, unlikely, and downright amazing phenomenon that is a very important factor in the wealth of the USA and even the world for the second half of the 20th and 21st century. It is amazing that people have the confidence to pay a bunch of money to own a part of a company based only on published information. But that is what makes America rich. It is that ability to quickly move money from where it is not needed to where it is needed and to reward the person sending the not needed money.
Now here is another hypothetical. Say you are insider of a company with a lot of stock in that company. You have just learned that something secret has happened which has doomed your company. Your biggest client said they would stop buying from you or something like that. You want to sell your stock. If insider trading is legal would you inform the public of the bad news? Or would you make sure you sell all of your stock first. Now say the same thing is true but insider trading is banned. You are a big stockholder and you know the SEC is watching you. What do you do? Well you inform the public asap, so that you may sell your stock legally albeit at reduced prices. Which of these outcomes is better for society, and for the well being of the stock market?
I suppose insider trading is hard to enforce. Well actually it is not that hard to enforce for the important people -- the company leadership that have all the important insider information. But there are other crimes that are also hard to enforce but we keep them crimes, because they are terrible, cause a lot of damage and we as a society should do what we can to avoid them. Should we make bicycle theft legal because it is so hard to catch bike thieves? How about date rape?
> This is the popular libertarian opinion and it is half thought out and wrong, like most libertarian opinions.
I'm not a libertarian exactly, but it always boggles my mind how the philosophy that at least tries to remain consistent with the ideal of not aggressing on the life, liberty, or property of others receives some of the most derisive comments.
> Would you buy stock from an insider?
Yes, because I understand that corporate employees qualify as people too and need to pay bills now.
But it's important to recognize patterns. If 3 out 5,000 employees are selling their stock in the week before earnings, it's probably just normal bill shuffling. If 3,000 out of 5,000 employees are selling their stock in the week before earnings, that probably means something far more significant. Let the market figure out what the patterns mean.
> Now here is another hypothetical.
IMO, any hypothetical you can come up with can be answered by pointing out that financial speculators perform a useful social service. By trying to buy low and sell high as soon as possible, speculators speed up price adjustments to their optimal point and make stock prices less volatile than they otherwise would be. This ultimately means that price discovery should happen faster and resources should flow quicker to wherever they'd be more useful.
> Should we make bicycle theft legal because it is so hard to catch bike thieves? How about date rape?
A bike thief or a rapist unambiguously violates the right to life, liberty, or property of another human being.
Insider trading is different in that it's labeled as a crime where there's arguably no victim.
> I'm not a libertarian exactly, but it always boggles my mind how the philosophy that at least tries to remain consistent with the ideal of not aggressing on the life, liberty, or property of others receives some of the most derisive comments.
If you care to unboggled, it’s because a lot of libertarianism’s consistency is owed to it reducing a lot of real-world scenarios to very simple models where a specific freedom’s primacy is preordained by the choice of model.
For whatever that means to the libertarian, it leaves a lot of room for other people to see it as reductive — ignoring the difficulty of reconciling conflicting freedoms and often dismissive of higher-order freedoms.
It’s a philosophy that’s been championed by some very smart, very committed thinkers, but it’s also one that’s very easy to exercise naively and very inviting to criticize on those grounds.
Even when libertarian arguments are put forth in good faith it frequently falls victim to spherical cows reasoning.
And too frequently libertarian arguments appeal to first principles reasoning in order to take an ahistorical view towards specific issues, especially if the person making the argument currently benefits from the historical context.
> I'm not a libertarian exactly, but it always boggles my mind how the philosophy that at least tries to remain consistent with the ideal of not aggressing on the life, liberty, or property of others receives some of the most derisive comments.
Because every time you need to apply such a reductive philosophy to reality, it falls apart. This would be fine if they adopted it as a purely personal lifestyle but they try to push it as a feasible form of government.
They do this by mostly ignoring the real world complexity and real historical issues when aspects of their philosophy were actually applied.
Examples? I’ve seen arguments police should be entirely privately funded, insider trading should be legal.
> I’ve seen arguments police should be entirely privately funded
Not by an actual libertarian. Under actual libertarianism, using force against others is in the purview of government. I.e. the police are specially empowered to use force against people.
This cannot be privately funded, because then you have private armies running around oppressing anyone their employer doesn't like.
> But it's important to recognize patterns. If 3 out 5,000 employees are selling their stock in the week before earnings, it's probably just normal bill shuffling. If 3,000 out of 5,000 employees are selling their stock in the week before earnings, that probably means something far more significant. Let the market figure out what the patterns mean.
I'm not saying it's impossible, or doesn't happen, but IME it's incredibly unlikely that 3k of 5k employees would know about earnings before they were anounced to the public. Corporations just don't work that way. The C*Os and some of the finance team will know, but >95% of the employees will find out when the public finds out.
> The C*Os and some of the finance team will know, but >95% of the employees will find out when the public finds out.
That 3,000 number was just a hypothetical, but I'd say that even knowing that 1 key insider bought some massive dollar value of calls leading up to earnings or sold a large number of shares before earnings is a valuable data point that provides better information to the public.
>how the philosophy that at least tries to remain consistent with the ideal of not aggressing on the life, liberty, or property of others receives some of the most derisive comments.
If you combine the libertarian idea that a property owner can fully control what happens to their property along with the idea that the right to contract is absolute what happens when the entity that owns the road in front of my home says I can no longer use it unless I shop only at his stores?
A lot of libertarian ideas simply do not work when combined together due to human nature to enrich themselves at the expense of others.
> If you combine the libertarian idea that a property owner can fully control what happens to their property along with the idea that the right to contract is absolute what happens when the entity that owns the road in front of my home says I can no longer use it unless I shop only at his stores?
Of all of the hypothetical arguments against libertarianism you might have picked, this is one of the least questionable ones.
If you buy a property today where property access might be a theoretical issue with no direct street access, the real estate agent, lawyer, or title clerk is already recommending/ensuring that explicit easement rights are added into the contract or the deal usually falls apart. Additionally, even if access isn't explicit in a contract, as far as I understand it, courts generally recognize a common-law right to access your property and have a number of doctrines available to ensure that nobody is just boxed in and trapped in a property with no recourse available to access it.
The courts of today don't follow libertarian principles which changes the outcome of my little what if.
A decent amount of libertarian ideas run into issues like this where the assumption is that current non-libertarian systems will keep them in check but this sort of mixed system isn't what a large segment of libertarians appear to want.
> In the case of Apple, not only did the board send two sacrificial lambs to slaughter, but the feds hung some pretty hefty charges on their necks to boot. The lambs in question are former Sr. VP, General Counsel, and Secretary Nancy Heinen [settled with the SEC for $2.2 million], and former CFO and director Fred D. Anderson [settled with the SEC for $3.5 million].
> The SEC's complaint focuses on the backdating of two large option grants, one of 4.8 million shares for Apple's executive team and the other of 7.5 million shares for Steve Jobs.
...
> At the end of the day, Jobs dodged a bullet because of 1) his value to Apple's shareholders, 2) his value to the U.S. economy, and 3) just plain luck that neither Apple's board nor the SEC found a smoking gun to force them to do something they didn't want to do.
I will not claim to know the details of this particular story. But I do want to point out that, when I joined Apple, stock options were part of their bonuses. We were told whether or not we would get stock options, and when, during our annual one-one meetings with our managers. These meetings were held across the company over a period of a few weeks. We were told that the price of the option would be the minimum price over some period of days up to the time the board approved the employee options for everyone who was given them. So if employee a was told their award at the beginning of the month, and employee b told three weeks later, they would be given the option at the same price. This applied in my case, and seemed completely fair to me. I was a lowly engineer with no special value to the US economy, the shareholders etc. It was a sensible and rational way to award stock options. Apple switched to a new scheme, probably to avoid the appearance of something untoward, namely RSU: actual stock awards rather than options, but with restrictions on when we got them.
Backdated stock options is just not comparable to insider trading.
> According to Forbes, which broke the Apple stock-backdating story, Jobs’ award of 7.5 million shares got approved at a board meeting on August 29, 2001. At that point, Apple’s share price was $17.83. However, Jobs continued to argue over the point at which the options would vest. That resulted in Apple missing the deadlines for filing the proper information with the Securities and Exchange Commission and its auditors.
> It took until December for the parties to agree upon terms. At that point, Apple’s stock price stood at $21.01. Backdating gave Jobs a lower share price that, on paper, made him $20 million richer.
Morally speaking I find this comparable to insider trading. At the time Apple was worth approximately 300x less than it is now, so the $20 million damage to the shareholders back then would correspond to about $6 billion today.
Steve Jobs lived his life to break rules in front of others for a show of animal dominance. A guy who parked his 12 cylinder ultra-luxury sedan in the Handicapped parking spot repeatedly, daily. Its not just "FU handicapped", its FU handicapped and if you say anything to me, now or later, you are fired. He was famous for firing a nervous nerd during an elevator ride who couldn't justify his job on the spot. The stories are endless. There was no one like Steve Jobs and that is true.
(There's several books people have published about their time at Apple where he yelled at them sometimes, but I note all those people were distinguished engineers+ and he'd made them multimillionaires.)
> (There's several books people have published about their time at Apple where he yelled at them sometimes, but I note all those people were distinguished engineers+ and he'd made them multimillionaires.)
I feel like that's not a good excuse for yelling at people, but I guess not having made anyone else a multimillionaire and no one having made me one, I don't know the proper decorum for them.
Should say the book authors themselves agree, it's not like they were calling him out. This mostly came from nontechnical commentary who just thought they were low-level guys getting yelled at by the CEO.
Breaking rules in front of others and the examples you give are not comparable to a show of animal dominance. It's a show of power within a corporate environment that has the opposite effect and only shows weakness. If Steve Jobs thought he was expressing animal dominance through those instances he clearly would have misunderstood the concept.
So the thing is it's not wrong to backdate stock options provided you disclose you are doing so. And Apple didn't, that was where they went wrong, and the harm was to the Apple shareholder because his shares got diluted deceptively.
Keep in mind that backdating options can be legal. It's illegal to do this and not disclose it to shareholders. My understanding is that this is the same scenario that the Blackberry team got in trouble for.
> Morally speaking I find this comparable to insider trading.
What? If he had just taken the original vesting terms without arguing he would have gotten the lower share price and the outcome would have been the same, right?
Don't see how that's irrelevant. From my perspective the share price was already agreed on, the only thing that was still being negotiated was the vesting schedule.
I don't think anybody's saying that employees were wronged by options backdating. It's fine for companies to award options to different employees at a uniform strike price out of a concern for fairness. In broad terms, companies can compensate their employees mostly however they like.
But whatever compensation a company awards, they have to account for it and in some cases truthfully disclose it. It matters when the employee gains the ability to exercise the option; awarding an at-the-money option isn't the same as an in-the-money option (and wasn't in those days).
Lots of companies were doing this; in Apple's case, they falsified the minutes of their Board of Directors to invent a special meeting so they could pretend they had compensated Steve Jobs (and others) differently. (https://www.theguardian.com/business/2006/dec/30/citynews.ne...)
My sense was that stock options became unfashionable after the dot-com crash. That is at least why I assumed Apple switched to RSUs. There may have been other legal reasons though.
There is a lot of complain about in executive compensation. High on my list is Sundar Pichai. And you can go way beyond that to the likes of Marissa Mayer or Meg Whitman.
The intent behind insider trading and similar things is that you are effectively stealing from shareholders or the company.
But you want to use Steve Jobs as an example? Whether you like Jobs or not, the wealth he created for Apple shareholders is completely undeniable. By comparison to a lot of executives today, JObs' pay packet wouldn't even hit the top 10.
Trying to argue that options backdating or any other such allegation somehow defrauded any Apple shareholders is such a stretch it belies someone who typically just hates Jobs and shouldn't be taken seriously.
I'm really in awe of what Jobs created. Still, wrong is wrong. I frankly find your attitude weird. I am capable of holding multiple (sometimes conflicting) thoughts/opinions about someone - are you?
You'd have to not be paying attention over the years not to realize the SEC monitors big changes in stock prices and who benefits from them. Even if you tell your neighbor or brother-in-law and they benefit, you're not in the clear.
The funny thing for me is: this guy had to know that.
I don't know how Apple does this, but at Google I chatted (not really an "interview" yet) with a guy who interrogates and catches people like this. Interrogating someone who's probably lying is a skill that law enforcement people have, and most of us don't.
He had a background with the FBI, and I had no particular skills he wanted. But catching people exactly like this was part of his job. I don't know about this guy. He doesn't seem to have a LinkedIn profile.
When you fly into Israel their security officers interrogate you. They'll ask random questions with you don't expect. The officers are trained at detecting human lying behavior. Your actual answer to the question is somewhat irrelevant, it's all HOW you answered.
When you're rehearsing a difficult pitch to your manager you expect roadblocks to be thrown up in a particular order. When you realize that you're somewhere doing something that could possibly get you into trouble, you rehearse a much simpler story. Like realizing halfway to your new apartment with the last carload that you put all of your liquor in a box, but that box is not in the trunk (or you don't actually have a trunk because SUV) so technically you have open alcohol in your car, or having to piss like a racehorse driving home from the airport at 2 am because your flight was late and you don't know where anything open is so you're just doing 40 in a 30 the entire way home. These are all things within the normal realm.
And then there's making up a completely fictional person and pretending to be them, after almost no practice. Having never impersonated anyone, I can't tell you much about this, other than what you've all seen on TV. But I do know what it feels like being stuck in a conversation where you don't like where it's going. Was that question innocent, or loaded? What is this bozo going to ask me next, and at what point is he going to compare me to Hitler or Charles Manson? So your brain is trying to unravel the rope that you're pretty sure is being slowly coiled around your neck and hoping you can pull off some verbal judo to duck out of it before it starts to tighten, without coming off like a complete ass to do so.
That sort of dishonest communication usually is in front of an audience, so it matters to the audience that the walls of this jail cell are built in an orderly fashion. If I'm just trying to figure out if you're a drug mule or a cell leader instead of a journeyman jeweler looking for a business relationship then there is no audience, and I can ask the questions in whatever order I feel like it. The audience comes later when I'm testifying against you, and the prosecutor and I can build the story after the fact.
> Interrogating someone who's probably lying is a skill that law enforcement people have, and most of us don't.
Interrogating is one thing, spotting the lie (or the inconsistency that leads to spotting the lie) is another skill entirely. I have a colleague that is scarily good at this.
It's just like driving the car. Difficult to focus at the begging but once you practice for some months it feels quite natural. The next level is driving the interview to expose deception and that's a nightmare since you need a super high level of self control.
I am fairly intelligent, and consider myself emphatic and not unintelligent emotionally, but I just can't spot lies. By default I assume people are telling the truth and can't seem to override this setting in my brain.
That episode quotes an opinion paper in Frontiers in Psychology, which I'll also do here:
> Is the rational course simply to drop this line of research? ...We have now sufficient evidence that there are no specific non-verbal behavioral signals that accompany lying or deceitful behavior. We can safely recommend that courts disregard such behavioral signals when appraising the credibility of victims, witnesses, and suspected offenders. For psychology and law researchers it may be time to move on.
I read that. Good article. I'm sure there are a lot of charlatans out there.
On the theory of Skin In The Game: instead of doing these experiments like this, I would find a consistently winning poker player. Or a cop who's consistently caught suspects in lies. That is, people who've shown that they can detect lies.
It might be that they can't even tell you what they do. Even worse, maybe they fail in these artificial experiments. I'd still hire the cop who's succeeded at it.
Those courses tend to be snake oil, this is a hard won skill, the main component seems to be the ability to hold a 6 hour conversation in your head all at once.
It’s worth considering that this is likely not the whole story. If he was corrupt enough to do this himself, there’s a non-negligible chance he had plenty of other family and/or friends who were also likely trading on privileged information and which he may have had some other beneficial deals with that haven’t been found out
Considering he started there in 2008 when the market cap of apple was <$100bn I’m going to guess it was low 6 figures and that the insider trading represented a meaningful amount of money to him.
??? According to Levels, ICT5 at Apple is ~$440k TC averaged over more than 150 datapoints. That's not even management...
I think it's safe to say that $600k couldn't have been more than 20-25% of his TC over 5 years, IF that. Absolutely braindead to take that huge a risk for that little reward (not to mention a deeply shitty thing to do given his position, obv). That's not even close to 1x, never mind an order of magnitude!
There's companies handling publicly available salary information for them, better than Levels can fight back against them. Same with Glassdoor. Coopting both. And the data isn't objective, they show different averages to different people. Same firms handle both, they're on the same lists, part of PR budget.
But it does give a vague idea.
Better than that get a better picture from the Bureau of Labor Statistics that does in fact compile that information for each job and is much harder to fuck with, it's illegal in fact.
Salary data on this forum seem pretty inflated, well it's very warped. It's all to make it seem there's a giant pot of gold at the end of the rainbow if your program compiles and you "get hired."
Apple is literally swimming in money; my friends who work there are compensated well enough to buy one or more houses in the Bay Area. That's no small feat.
Imagine if every day you walked past a newsstand, and for some reason there is an envelope with $100K in cash there, every day, all the time. It's totally illegal to take it, but it's right there in front of you, and so easy to grab, and no one's going to notice...probably.
A quarter million bucks. Peanuts. With a director's comp and Apple's performance all this guy had to do was vest and hold, sell during legit trading windows, walk off with a hundred million easily.
This is exactly what I don't understand. From this line:
> In fact, he even informed Apple employees about a trading blackout period for AAPL stock, while also buying and selling the stock himself.
I mean, that's super black and white and super hard to hide. I just read the article, not any of the linked source materials, so I'm curious as to how he tried to hide these trades (I'm assuming he did).
This cannot be the whole story. This guy is a lawyer, and not just some rando junior lawyer in the company -- one who actually reviewed financials before publication. How can it possibly be the case that he wouldn't be aware that his (and his family's) trades are monitored?
.. because his secrecy, his self-control and his control of others in the room was "perfect" .. This obvious hypocritical ego bully jerk BS that can be seen from a mile away and the other finance people WANT IT. just my guess
Imagine you have a deal with a friend who is a stock broker. You supply him with insider information to make trades. You give him your money and he makes trades on your behalf, and to conceal the deal, he trades Apple stock uniformly across all clients. He doesn't do anything that would make you stand out.
Or let's say his greed doesn't get the best of him and he doesn't invest anything but conservative sums of his own money in Apple stock using this information, and then, to launder kickbacks, you start a small company unrelated to investing that he pays for something intangible (like a "membership" or "retainer"), or he pays you cash.
I would find it difficult to believe that this sort of stuff isn't happening all over the place.
I theorize that the best way to solve the fairness issue of insider trading is to make it legal, but incredibly transparent. There is no way to catch the overwhelming majority of the actual insider trading that happens short of a dystopian SEC that continuously monitors everybody's phone calls, movements, emails, and all of their finances or just banning employees of publicly traded corporations from investing in their hard work, which also seems unfair.
The best way to benefit the public is for price speculation by insiders to be telegraphed either in real-time, or preferably with advance notice, to any member of the public.
If Joe Sixpack working at Apple wants to buy or sell stock or options the day before earnings (or any other day) based on some knowledge he has, I'd say it should be legal. He should just have to report that intent to some SEC website. Any member of the public should be able to go to some well-designed SEC website the day before and see that Joe along with 465 other employees plan to buy XXXX calls. If insiders want to trade in publicly traded companies, people should be able to have data on that to notice patterns and benefit from this information. If they decide they want to sell some stock, that should be reported at least in real time, or preferably with at least 1 day notice. If the goal is to benefit the greater public, the information should be designed to flow to the public.
This pre-knowledge of their trades is the rule I especially want to impose on the corrupt legislators, some of whom are known as suspiciously good traders for senile old people. The rules that they can wait 30 days before disclosing their deals are BS. They should be reported at least in real-time, or preferably at least a day before. This seems like a small price to pay for making the rules that pick the winners and losers in the marketplace, as well as the overall direction of the economy.