Skip to comments.The incredible stock-picking ability of SEC employees
Posted on 02/27/2014 10:26:23 PM PST by Brad from Tennessee
Forget hiring a top hedge fund to manage your portfolio. Your better bet might be an employee at the Securities and Exchange Commission, according to a new report suggesting that regulators are trading on inside information relating to investigations and upcoming enforcement actions.
In the report titled "The Stock Picking Skills of SEC Employees," researchers found that SEC employees' stock purchases look like your average person's. But when these employees sell their stocks, they appear to systematically beat the market by making sales within weeks of costly enforcement actions by the agency.
"These results suggest that SEC employees potentially trade profitably under the new rules, and that at least some of their profits potentially stem from trading ahead of costly SEC sanctions and on privileged non-public information," write Shivaram Rajgopal, a professor of accounting at Emory University, and Roger M. White, a doctoral student in accounting at Georgia State University. "In short, it appears that SEC employees continue to take advantage of non-public information to trade profitably in stocks under their regulatory purview."
A spokesperson for the SEC, which has made crackdowns on insider trading a priority in its enforcement division, declined to immediately comment. . .
(Excerpt) Read more at washingtonpost.com ...
some of you people voted for this...
The fedgov is utterly, completely, and irrevocably corrupt.
The bigger a government becomes, the more corrupt it becomes as well
And we have a HUGE government.
Nothing to see here, folks. Move along.
Maybe Hillary is helping them with this. She seemed to have a sixth sense when it came to trading cattle futures...
Yesterday we had the article about thieving treasury employees. Feds declined to pursue charges. This won’t be any different.
Nester explained that before staff can work on an issue that involves a company, they have to sell any holdings of stock in that firm. As a result, he said, there shouldn't be any surprise that a sale would precede the announcement of an enforcement action.
I understand the rationale, but this is still a nice trick. Maybe SEC employees should be limited to widely held mutual funds. Or put their money into blind trusts.
The way I would interpret that is that whenever the government (SEC) starts getting involved in a company, that company will suffer ("I'm from the government, and I'm here to help you.") and so if the SEC is going to come knocking, it's best to sell. And so the SEC wrote that into their rules to make sure their employees can always "ethically" sell at just the right time.
America - funded by the PEOPLE for the EXEMPT and
their terrorists and their schemes which are ILLEGAL
for the NON-EXEMPT.
America - 5 classes under “law” that depends on skin color,
party affiiliation, and job.
At the top: The EXEMPT (Congress, pOTUS, SCOTUS, Moslems)
Below THEM: Blacks above all “laws”
Below THEM: Terrorists above all “laws”
Below THEM: Federal Employees
Below THEM: Criminal Illegals
Below THEM: White, hispanic, and asian American taxpayers as the new slaves.
I’m shocked, shocked...I tell you!
You're being way too polite. This is no different than theft under the color of law. "You have to sell your holdings in this company before you gut them. Congratulations on being assigned to the case."
It essentially allows the SEC employee to get out from under what is going to be a less valuable stock because of litigation, in advance, for a legal reason. The rest of us should be so "lucky".
Maybe the way to deal with this is to watch company stock sales, and when the SEC employees start selling, sell your holdings. Of course, then they'd come after you for selling based on "insider information".
That's better than Hillary Clinton's massively brilliant future's trading. Those democrats sure are impressive.../s
Hell, John Kerry’s wife, dead republican Senators former wife, makes that much every day on her dead husband’s fortune. Kerry has been living tall on the money of one of his republican betters.
“A spokesperson for the SEC, which has made crackdowns on insider trading a priority in its enforcement division, declined to immediately comment. . .”
Well, that’s because there’s an ongoing investigation...
There will ALWAYS be an ongoing investigation.
I’m shocked — shocked I tell you — shocked
Our government is more out of control than a lot of the governments that have been overthrown for being out of control.
The dirty little secret about the Oil for Food Program, it was a giant insider trading scam.
The $65 billion everyone was worried about was nothing but chump change, the cost of doing business.
The real money was in the hundreds of billions at least.
Take ‘em out back and shoot ‘em!
Where would one find this information? Is there some public record of who sold stock that you or I could access?
I don’t know, but I would think it would have to be a matter of public record since they’re members of the SEC itself. I did a quick check and didn’t find anything and then of course realized that, just like everything else, the government probably exempts itself from that kind of reporting.