From: "Perry E. Metzger" <perry@piermont.com>
Date: Tue, 4 Jun 1996 15:33:22 +0800
To: ichudov@algebra.com (Igor Chudov)
Subject: Re: Anonymous stock TRADING (was Saw this on CNN: )
In-Reply-To: <199606040240.VAA31145@manifold.algebra.com>
Message-ID: <199606040353.XAA06812@jekyll.piermont.com>
MIME-Version: 1.0
Content-Type: text/plain



Igor Chudov @ home writes:
> Which brings up another ignorant question: suppose that I am a 
> corporate officer who does receive substantial "insider" information,
> for example results of audits, before they become public. What would
> prevent such an insider from creating a phony offshore trading company,
> and sending orders to that company using cypherpunks technology? 

Very little. However, there would be a noticable shift in the price of
the stock prior to the public information arriving. This would trigger
an investigation. There would be a very limited number of people able
to get at the inside information, so the pool of suspects would be
small (usually on the order of a dozen people or less), and if you,
say, wanted to spend your money, you might end up being caught.

In other words, anonymity works better when the "crime" isn't visible
to anyone watching the stock market and could be committed by more
than a handful of people.

Personally, I don't object to insider trading, but it can be hard to
get away with depending on circumstances.

Perry