The rambling thoughts of a Modern Orthodox Chassid (whatever that means). Contact me at emansouth @

Sunday, March 04, 2007

Insider Trading

I have to admit that I don't get this. Thirteen people, many executives in important investment banks and hedge funds, were charged by the SEC with a brazen insider trading scheme that has apparently been operating since 2001.

I have absolutely no sympathy for these people (assuming they are guilty as charged). What they allegedly did was a breach of trust, a breach of their duty to their employers, and, finally, outright theft. One of them was in the compliance department of an investment bank, for crying out loud! Throw the book at them, MoC says.

I also have a couple of questions:

1. What were they thinking? Did they think the SEC wouldn't ultimately pick up their trading patterns and scope out the scheme?

2. Did they really think it was worth jeopardizing their careers for a few extra bucks? From the looks of it, many of the people involved had very significant positions and were either already making nice money or had the potential to make a lot of money?

3. I don't think the answer is that they were greedy. I deal with greedy people every day. 99.9% of them don't break the law or don't cross the line with outrageous and brazen schemes. There is more at work here. A need to gamble? A need for excitement? A need to prove that you can get away with something? I don't really know what it is.

The bottom line is that these people have sacrificed the rest of their lives in the financial markets for a few extra bucks. I feel bad for their spouses and kids.



  • At 12:46 PM, Blogger Fern said…

    I have long thought that the major difference between the law abiding masses and criminals is that the law abiders believe most criminals get caught and the law breakers believe that most criminals get away with their crimes.

  • At 3:25 PM, Blogger Still Wonderin' said…

    For people with certain mental conditions such as bi-polar disorder and ADHD, the need for excitement and stimulation nears physiological need.

    Am I wrong to say people with these conditions typically drift toward trading and other aspects of finance?


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