Hacker May Get To Keep Insider Trading Windfall -- Because He Obtained Info Illegally

from the say-that-again dept

The NY Times is covering a bizarre anomaly associated with "insider trading laws" in the US that may allowed a guy to keep the nearly $300k he scammed by hacking into computers to learn of earnings info before it was actually released. Apparently, the way US securities laws work, if you legally obtain the insider info, you can't trade on it. However, if you illegally obtain the info, you can trade on it, though you're certainly potentially liable for the illegal actions that allowed you to get the info. In this case, the illegal actions were breaking into this computer. However, rather than being charged with computer fraud, he was charged with insider trading. In other words, he was basically charged with the wrong crime, and that may mean that he gets to keep the $300k and go on his merry way.

Filed Under: hacking, insider trading


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  1. identicon
    R.H., 19 Feb 2008 @ 7:32am

    Re: Re: And the government still gets its cut...

    And this is why the prosecution can't use a tax return against you in a court of law. I could say that I was a pimp earning $45,000 a year from my 'business' and they couldn't use it as evidence since otherwise by making it illegal to not file a return the government would be violating my right to not self-incriminate. However, I haven't seen anything in the law prohibiting the government from using a tax return as 'probable cause' for a warrant or as a reason to just follow you around and wait for you to break the law.

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