Mercury Rising 鳯女

Politics, life, and other things that matter

Just lucky

Posted by Charles II on February 28, 2014

Jia Lynn Yang, WaPo:

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.”

I have to say, all the most successful investors, guys like Warren Buffett, do it this way: trade on inside information. I still can’t believe that Martha Stewart of all people did jail time for what goes on all the time.

6 Responses to “Just lucky”

  1. jo6pac said

    That’s great news in that get a job at SEC and instead of being the watch dog you can make money and lot of it. I wondering if this will stop the revolving door syndrome because who wants to go to ws and work those long hours. Isn’t Amerika a great country for the few and well connected.

  2. This is the best argument I’ve ever seen for the death penalty. For the SEC or the employees — take your pick!

  3. MEC said

    Martha Stewart didn’t get jail time for insider trading. She got jail time for insider trading while Democrat.

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