It’s a bad idea to engage in insider trading. An even worse idea is going on social media to brag about the nonpublic information you have obtained.
That’s what the Securities and Exchange Commission alleged Maziar Rezakhani did after paying an ex-Amazon employee $US10,000 cash for access to the company’s earnings results.
Rezakhani then went on “at least two trading-related internet communications platforms” to forecast that Amazon would earn $US22.7 billion in revenues and lose $US0.12 per share, according to the SEC. Even a “5 year old can guess what they will do,” because the “numbers are so obvious,” Rezakhani allegedly wrote. He made more than $US116,000 in profits based on the results, the SEC alleged.
Their plan was to open a hedge fund in New York after making a number of successful trades through Rezakhani’s brokerage account, the SEC alleged.
To make trading fair, the SEC prohibits anyone from trading while in possession of so-called material nonpublic information.
Rezakhani and Kennedy settled with the SEC for about $US30,000 combined without admitting to or denying the allegations.
Rezakhani “failed to predict that we would catch him and his accomplices in their illegal scheme,” the SEC said.
Amazon declined to comment.