SEC Asking For Real-Time Information to Detect Insider Trading

SEC is asking for real-time information to detect illegal insider trading. Here is why:

On August 12th, 13th, and 16th Juan Jose Fernandez Garcia, head of European Equity Derivatives at Banco Santander bought out of the money call options of Potash for $13669. On August 17th he sold his options for a profit of $576000. Do you think he was merely lucky? Banco Santander, employer of Mr. Garcia, was an advisor to BHP which made a tender offer to acquire Potash for a significant premium. More than 90% of the options bought by Garcia were due to expire on August 21st. Why would any buy call options with a strike proce of $130 and expires in a few days when the underlying stock is trading at less than $110?

Banco Santander, S.A. (ADR) (NYSE:SAN)

This is obviously an illegal insider trading case involving investment bankers. Garcia’s brokerage firm, Interactive Brokers, noticed the suspicious transactions and notified SEC. Interactive Brokers also bloked the transfer requests for most of the illegal profits. This is a successful enforcement by the brokerage company, not the SEC. Currently SEC does not have real-time access to market transactions by individuals.

Currently SEC has to make multiple requests to brokers to obtain transaction information about a specific security. Hey, no wonder they are slow in detecting illegal insider transactions perpetrated by securities professionals, lawyers, and accountants. SEC does not know which trades are suspicious because they don’t even see the trades. How do they investigate illegal insider trading then? If somebody complains or tips them about illegal transactions, then they start investigating the allegations. Maybe they just read WSJ or other financial websites to get ideas.

I am not going to delve into the discussion whether we should spend millions of dollars to set up a real time tracking system for the SEC. All I wanted to point at is SEC’s weakness in detecting illegal insider trading cases.

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!