Dropping SSNs for natural persons would be a good idea.
Hiding SSNs is false security at best. If they were public, banks would stop hiding behind "identity theft" and would start having to acknowledge that its their responsibility to confirm who they are lending money to.
All legislation aimed around allowing people to be identified by numbers has been killed due to the whole "mark of the beast" .. "can't buy sell or trade without your number" revelations rhetoric.
As religion has less of an impact on people's daily lives, I expect this to change, but in the past it's been the one thing that's always prevented proper identity management in the USA.
I am curious to know though, if there are other countries that don't identify their citizens with a public id number?
You have a TFN  (tax file number) in Australia, which are similar to an SSN, except somewhat more limited. My TFN is only used for income tax, not for identification, and I'm not actually legally required to supply it to anybody, even my employer (although it does make paying taxes a real pain as they withhold the maximum amount). You aren't even legally required to have a TFN, although once you get one you have it for life, and without one you pay the maximum income tax.
TFNs are specifically forbidden to be used for anything other than income or benefit purposes too. Businesses aren't allowed to ask for it as a form of ID.
I don't necessarily agree with those objections but there have been multiple reasons.
This is easy to solve; simply make it illegal to use the identification number so capriciously. Define a narrow use-case for it, narrow enough to allay religious fears, and forbid anything other use if the ID number. Make it illegal to require customers to provide their ID number while making purchases, etc.
But once you do that, most of the desire to implement the system starts to disappear...
Hmmmmm, that sounds familiar... https://en.wikipedia.org/wiki/Social_Security_number#/media/...
While it wasn't law, I don't see why legislature wouldn't renege on their promise to not use a unique identifier, already conveniently assigned to all people, for identification purposes.
Maybe it's cynical, but I don't believe there is any limit on how many times you can lie to the public. There's only a limit to the frequency.
One problem is that it's not unique. :)
AFAIK they are not ever unique
> To date, 450+ million SSNs have been issued, but with just under 1 billion possible number combinations, there has never been a need to recycle numbers, and the SSA notes that it does "not reassign a Social Security number (SSN) after the number holder's death."
If you have two systems and you want to correlate data between them, you can use something like the SSN to assist in that process, but usually it will need additional information.
Generally you can't use something someone supplies as a shared identifier. You can't start the process of verifying it, after all, without an identifier. You might think of all sorts of ways around this, but they all boil down to either tolerating errors or making the SSN a secondary attribute rather than a bona fide identifier.
There are actually lots of dummy SSNs that are used by a lot of people (including illegal workers).
Is that something that goes against the American culture? The other day I had to give all 10 fingerprints to renew my driver's license (location: South America) and nobody seemed to care.
Of course in 2019 this is basically a moot point if you want to be integrated into society, but even then there are people who are legitimately not integrated into the modern US economy by choice.
Conservative Christian fundamentalist groups have, ever since Reagan, likened a national ID card to "the mark of the beast", citing Revelation 13's prophecy that no one could buy or sell goods without the number of the beast, and the reference to God's chosen people that refuse the mark of the Beast.
When a small but meaningful fraction of your constituents fervently believe that giving them a national ID literally damns them to Hell, it's a hard sell.
Much easier if you attach it to a tool (Social Security) with which they can get money.
There's also the angle of State's Rights and whether the federal government can require people to have national ID over just amalgamating the various state IDs.
Finally, Americans generally distrust their government. Not without reason, they believe a national ID would reduce their privacy and allow the government to more easily spy on and track them.
It's hard for a phone bank operator to ask for a photo ID.
I assume the fingerprints thing is for future crime solving?
We would call that an error on their part, and I don't see why the same logic doesn't apply here.
Which makes it all the more ridiculous that as an immutable identifier, it's also supposed to be a secret.
They're names, not passcodes.
The number itself is of course used for identification from the beginning as a unique identifier for your "account" in the social security administration.
According to the article it seems that it was intended to be used for identification, just only for one purpose.
What's WEIRD is that area of law around liability though.
IF you own a company and you're the only employee and someone dies you're in a world of hurt.
If you're Walmart and you kill 100 people by accident basically nothing will happen in most cases.
It would but it isn't the SEC's decision to make and the Treasury Department & DOJ would never allow it. This is one of the primary means of investigating the flow of dirty money through the financial system.
Three days before a positive press release, demand pressure beings to drive up the price. Coincidence? I'm too jaded to believe that.
Insider trading laws remove information from the system. A common argument is that Enron could have never Enroned without the help of insider trading laws.
The big winner here is Wallstreet because the information asymmetry still exists, and they now have the most knowledge that can legally be acted upon. (plus they can act on illegal knowledge and it's much harder to prove than anyone else acting on it).
It seems very complicated, and I don't really understand. But it seems like in either cases (legal or illegal) the people who benefits and those who suffers is going to change in every case. For the average investor, in some cases having more efficient stock prices would be a benefit, in other cases, the added information asymmetry would be a unfair.
1 - Companies could still ban insider trading if that proved more efficient for them. If liquidity was low because insider trading was allowed, they could disallow it. The reverse is also true. So at least companies would have the choice (and investors would also have the choice of where to invest).
2 - While an insider could equally benefit from good and bad news, they are still incentivized towards positive results (salary, bonuses, keeping their job, reputation)
3 - My real problem with making insider trading illegal is that it's completely impossible to enforce consistently and fairly. This adds uncertainty (how much insider trading is going on in your current investments?) I think insider trading only applies to buying/selling, but what if someone has insider knowledge that causes them to NOT take an action. That seems as unfair but can't be enforced..
On one hand, you have the accountants/analysis that build the company numbers to be made public for investors to trade, and because they get the first peek at information that is not really theirs, if they buy/sell on that then they are definitely commiting this act.
On the other hand, you could have Elon musk reading information every day that could sway him to buy or sell at different prices, from the unique vantage point of his position: this is raw information that is better out there than repressed. (investors wuld know what the CEO thinks).
I have an amateurish devotion to economics and insider trading is one space where its all nuance.
Wrong. It's insider trading if you have material, nonpublic information. It doesn't matter how you got that information.
Your article justifies it "Yes" answer because you were told the information was confidential, but then the "case study" used to back this up includes envelopes on cash being exchanged for this information. My reading of the other article seems to indicate that you would be fine because the CEO was not compensated by you for providing the information and there is nothing to indicate that this information was given as a gift.
Given the bloomberg article cites relevant supreme court cases, I'm more inclined to believe it.
That's messed up. It should be a breach of fiduciary duty to continue to interface as investor relations with an investor who you have established a friendship with. Being friendly on the phone is one thing, but join family vacations? As the relationship becomes closer, the fishier any exclusive information provided should smell.
You become friends with someone? At a certain point both the investor and and investore relations personel should have to hand off the professional relationship to colleages to avoid the risk of insider trading charges.
I don't see the issue.
> Er. Um. Sure. But another component of effective professional analysis of the value of a company's stock is talking to the company. There's a reason that companies have earnings calls. There's a reason that, when analysts get into the weeds on those calls, the companies say things like, "We'll follow up with you individually afterwards." There's a reason that companies selling stocks or bonds do one-on-one meetings with potential buyers. There's a reason that companies not selling stocks and bonds also do one-on-one meetings with current and potential investors. There's a reason that companies have investor relations departments full of people who talk to current and potential investors.
All of this gets to a point Levine has also made many times over, which is there is no explicit statute outlawing insider trading. Which seems crazy! People go to prison over it. But when you sit down and try to define it, it becomes even more of a mess, so here we are.
You are totally mistaken as far as the law in the United States. I can’t speak for other jurisdictions.
> It doesn't matter how you got that information.
Yes it does, if I didn't do anything illegal to acquire it, and I have no obligation to the company, I can use it legally, I'm not an insider.
I would never expect a 90% success rate because of how random Wall Street is, but 77% over a period of time definitely is an advantage.
The article include a great line “The [Ukrainian] intelligence agents began running a parallel operation to the Moscovite middlemen, using Turchynov’s access and sourcing their own traders, according to Demedyuk.”
Edit: thanks a lot for your hints/replies!
Really just asking because I never heard about that company but saw a few days ago a post about its split into different sectors all having their names starting with "We..." and did not dig further (and I did not find anything useful today using my keywords).
Looks like a way to say “exfiltrating data from the endpoints”.
Sat down one Saturday to create a database for their Financial Statement and Notes data set https://www.sec.gov/dera/data/financial-statement-and-notes-...
Located documentation, thought okay this shouldn't be too bad. Ended up taking one day to understand the structure and another to implement the system. Finally got everything loaded in my tables and spot checked against the rendered versions on their website only to discover they truncate the most important text field. It's technically in the documentation that the value field is limited to 2048, but it's also in the documentation that the value field is for 'text analysis applications' and their website literally says: 'The information is presented without change from the "as filed" financial reports submitted by each registrant...' so I managed to gloss over this detail until I had already spent and entire weekend working on it.
I just can't wrap my mind around how they got 99% of the way there and then decided, 'hey lets just truncate this field, it's only the entire purpose of this dataset.'
I'm willing to bet this is because they haven't made any significant changes to the system since it was implemented in 1996.
Long-story short is that it's not always obvious how the market will react to releases. Some of the hackers only traded with a ~70% win-rate after holding the releases.
Apple struggles with this with almost every product release.
Given the thirty minute window between copying the file to the server and the SEC posting the URL, I figure they guessed the URL from an easily predicted sequence.
Yeah I remember the charges against those people too
Basically newswire services get hacked and people get the earnings reports beforehand
SEC gets hacked and people get the earnings reports beforehand
I think public resources shouldnt be spent on that. Prosecute the hacking but just drop the “trading on material non public information but only in the equities capital markets and only when there is a duty from the source to keep things nondisclosed” sanctions. It is so narrow but extremely expensive to prosecute, has with little efficacy in stopping the behavior, and incorrectly effects the collective conscious on what can be traded and when. People at this point think its actually illegal to have a trading advantage in any context
Are you taking issue with reason the law exists, or just that the people don't understand it?
And what's your basis for saying it's ineffective? From my experience, insider trading laws are taken very seriously by most of the industry.
Yes, they are effective at chilling speech and forms of legal trading. They are not effective at preventing trading on information, for example, the SEC and DOJ secured indictments against Ukrainians and Russians which it will never extradite. Wow a pen stroke after an expensive investigation, congratulations. Fix your damn IT systems if you want confidence in the securities market.
> are you taking issue with reason the law exists
Yes, I am. The industry takes these laws seriously without the SEC because all the SROs already had these prohibitions before the SEC copied and pasted some parts into the Code of Federal Regulations or created 10b-5 convictions that are SOMETIMES upheld by appeals courts before stripping them down in other circuits.
On the one hand, we want market prices to be accurate. This means we want people with material information to trade on that information.
On the other hand, we need some fairness in a market. This is mostly to ensure people keep trading. In a world were inside-info is commonplace, trading without it is just stupid. This would cut off a lot of people from investing.
The line needs to be drawn somewhere. The US approach of insider trading requires a broken 'duty to keep secret' isn't nice, but considering the above trade-off I think it is better than "All non-public information is off-limits". Especially because it captures the 'most disruptive' form of insider trading: people who work at a company that is getting acquired / going bankrupt.
American insider trading law has nothing to do with fairness. It is based on theft of information. In this case, the hacker’s stole information from the SEC that belonged to the reporting companies.
(This is a commonly misunderstood alley of securities law.)
"One objection is that it violates the fiduciary duties that corporate employees, as agents, owe to their principals, the shareholders (Wilgus 1910)."
That supports the theft formulation.
"A related objection is that, because managers control the production of, disclosure of, and access to inside information, they can transfer wealth from outsiders to themselves in an arbitrary and hidden way (Brudney 1979; Clark 1986)."
Again, supports the theft formulation.
"The economic rationale advanced for prohibiting insider trading is that such trading can adversely affect securities markets (Khanna 1997) or decrease the firm’s value (Haft 1982)."
This seems like the fairness argument, though.
Insider trading regs, as currently enforced in USA, get this exactly backwards. Senior C-suiters are not prohibited from trading their firm's stock. They only have to carefully choreograph that trading with respect to other events. They get as much advance time as they need to do this, and as much professional help as they (or the firm) can afford. They get all this time to scheme and pre-arrange, precisely because insider trading laws exist to hammer the lowly middle managers who would like to do their own trading on inside information.
The sooner trading based on information occurs, the sooner that information is public. The effect of these regulations is to keep secrets and make misguided investment more likely. All executives of a public corporation are in a conspiracy against the investing public. Insider trading laws function precisely to punish defectors from that conspiracy. This defection should rather be encouraged, so these are yet another set of laws the effect of which is entirely backwards from their supposed justification.
That’s theft of company (read: shareholders’) information by a fiduciary.
Remember: America has no statute barring insider trading. The rules were developed through case law. (There’s a hypothetical of “if a company insider shouts material nonpublic information on the street and you trade on it, is that insider trading” that lawyers love to opine on, but to my understanding that’s never come up in court.)
This is a common misunderstanding with respect to insider trading.
FWIW, I'm not expressing an opinion on insider trading, just arguing that this specific claim is overly broad.
If your only relation with a company is to own stock in it, you're not an insider, but any research you do may be based on public information, but is nevertheless material and as private as you keep it.
And there's a lot of research to do. The economic fable "I, Pencil" is about the sheer number of firms that any given firm is indirectly dependent on and indirectly affects. Thus, if you see shocks affecting any upstream suppliers, the shocks are public information but your knowledge that it's relevant to the firm you're invested in is private to you.
You are essentially stealing from your own company, since your purchase of shares will drive up price and result in your employer paying more than they otherwise would have.
Though for the record, I think insider trading should be legal, or at least should be a civil instead of a criminal matter.
The purpose of financial markets is decentralized price discovery and preventing the trading of certain types of non-public information is totally counterproductive in that regard.
I find this line of reasoning hard to swallow. As an individual I have significantly less info than hedge funds and other professionals but that doesn't change the fact that I want to buy Apple or whatever because I think it will grow over the next 5 years.
Now if you add in the scenario where all of the Apple employees are buying and selling based on unreleased earnings, that doesn't change my want to buy the stock at all.
How does Tim Cook buying some Apple shares right before good earnings change anything for a regular investor?
Your argument that professional traders would stop trading in unison if insider trading laws were abolished seems entirely unconvincing to me.
I don't think this is true, at least for most employees. I think this only applies at higher levels, though of course insider trading laws are still in force.
The legislature fails to have consensus on this topic and hasn’t weighed in since the 1980s (where it was only to add statutory damages if a conviction was achieved, but no clarity regarding how and when it could be achieved)
And courts strip or uphold nuances various of the agency’s sentiment leaving this to be largely unsettled territory, all while the people that staff these agencies have the same unclear and misguided (when courts later disagree) view on what kind of trading is or isnt prohibited
Other markets are completely exempt: Futures, currencies, metals, nike shoes, non-securities digital assets. I think this aberration for the securities market should be re-evaluated, as it is an expensive dragnet.
With this, people have a few hours to get the reports which means miliseconds matter less.
I knew an SRE that wanted to put up a fake earnings report until the official time at which the real one was released, to disincentivize this behavior, but the lawyers nixed that idea really quick.
1) They say that earnings will come out at a certain time, so they better be out at that time or else the SEC comes after them. If they just posted earnings as coming out at say 12:00:30 instead of 12:00:00, that just shifts the problem 30 seconds later.
2) The bots will just run for an extra 30 seconds, and will still have the advantage over ordinary people.
(Something I'm not clear on: regular Google - and Hacker News, for that matter - will sometimes just make a user's connection slower if they repeatedly hit it with traffic. Why not use that on bots that hammer the investor relations site? It completely disincentivizes these bots if the 100 requests you made at 11:58:30 mean that you get stuck with a 5 minute delay and don't get the information until 12:03:30. Or maybe they do use this approach and the SRE in question just didn't bother to tell me.)
For the latter, companies are not required to release reports on their website in a timely manner. That’s what EDGAR is for.
Fixed release times also means that the companies submitting the filings cannot pick an advantageous time. Imagine if Musk was sitting atop a really horrible Tesla earnings report. If he could manipulate the exact time of its release he could leverage all sorts of things.
Sounds like a good hacker movie.
There's already protection against him insider trading. Not sure what else "leverage all sorts of things" is.
Because the market opens with an auction, giving everyone time to retrieve the information, digest it, and place their orders. Whereas, if the market is already open, whoever's closest to the source of information, and the exchange, has an advantage.