Stocks, Crypto & Exchange
Closed channel
π° Know what you own, and know why you own it. π€ ~ Peter Lynch | @Exchange
Show moreThe country is not specifiedEconomy & Finance6 824
π Analytical overview of Telegram channel Stocks, Crypto & Exchange
Channel Stocks, Crypto & Exchange in the English language segment is an active participant. Currently, the community unites 34 971 subscribers, ranking 6 824 in the Economy & Finance category.
π Audience metrics and dynamics
Since its creation on Π½Π΅Π²ΡΠ΄ΠΎΠΌΠΎ, the project has demonstrated rapid growth, gathering an audience of 34 971 subscribers.
According to the latest data from 08 September, 2024, the channel demonstrates stable activity. Although there has been a change in the number of participants by 0 over the last 30 days and by 0 over the last 24 hours, overall reach remains high.
- Verification status: Not verified
- Engagement rate (ER): The average audience engagement rate is 0%. Within the first 24 hours after publication, content typically collects N/A% reactions from the total number of subscribers.
- Post reach: On average, each post receives 0 views. Within the first day, a publication typically gains 0 views.
- Reactions and interaction: The audience actively supports content: the average number of reactions per post is 0.
π Description and content policy
The author describes the resource as a platform for expressing subjective opinions:
βπ° Know what you own, and know why you own it. π€
~ Peter Lynch | @Exchangeβ
Thanks to the high frequency of updates (latest data received on 09 September, 2024), the channel maintains relevance and a high level of publication reach. Analytics show that the audience actively interacts with content, making it an important point of influence in the Economy & Finance category.
34 971
Subscribers
No data24 hours
No data7 days
No data30 days
Posts Archive
π΅ WHAT IS MISAPPROPRIATION THEORYβ
βΆοΈ Misappropriation theory postulates that a person who uses insider information in trading securities has committed securities fraud against the information source. In the United States, a person who is guilty according to the misappropriation theory may be convicted of insider trading.
βΆοΈ Though not expressly forbidden by U.S. securities laws, insider trading is considered to fall under the prohibition against deceptive trading practices and is thus illegal when committed using material nonpublic information.
βββββββββββ
π° @Exchange πͺ | π @Value π
π΅ WHAT IS AN INSIDER OF A COMPANYβ
βΆοΈ An insider of a company, as defined by the Securities and Exchange Commission (SEC), is an officer, director, or 10% shareholder of a company that has inside information into the company because of their relationship to the company or with an officer, director, or principal shareholder of the company.
βββββββββββ
π° @Exchange πͺ | π @Value π
π΅ REAL-WORLD INSIDER EXAMPLES
βΆοΈ In one of the first cases of insider trading after the United States formed, William Duer, secretary to the Board of Treasury, used information he gained from his government position to guide his purchases of bonds. Duer's rampant speculation created a bubble, which culminated in the Panic of 1792.
βΆοΈ Albert Wiggin was a respected head of Chase National Bank who used insider information and family-owned corporations to bet against his own bank. When the stock market crashed in 1929, Wiggin made $4 million. In the fallout from this incident, the Securities Act of 1933 was revised in 1934 with stricter regulations against insider trading.
βΆοΈ Martha Stewart was convicted of insider trading when she ordered the sale of 3,928 shares of ImClone Systems Inc. just days before the Food and Drug Administration (FDA) rejected the corporation's new cancer drug. By selling when she did, Stewart avoided losses of $45,673. For her role, Stewart was fined $30,000 and sentenced to five months in prison.
βββββββββββ
π° @Exchange πͺ | π @Value π
π΅ TYPES OF INSIDERS
βΆοΈ There are distinct groups of people the SEC considers insiders. Investors gain insider information through their work as corporate directors, officers, or employees. If they share the information with a friend, family member, or business associate and the person who receives the tip exchanges stock in the company, they are also an insider.
βΆοΈ Employees of other companies in a position to gain insider information, such as banks, law firms, or certain government institutions can also be guilty of illegal insider trading. Insider trading is a violation of the trust investors place in the securities market, and it undermines a sense of fairness in investing.
βββββββββββ
π° @Exchange πͺ | π @Value π
π΅ UNDERSTANDING AN INSIDER
βΆοΈ Securities legislation in most jurisdictions has stringent rules in place to prevent insiders from taking advantage of their privileged position for pecuniary gain through insider trading. Offenses are punishable by disgorgement of profits and fines, as well as incarceration for severe offenses.
βΆοΈ In the United States, the Securities and Exchange Commission (SEC) makes rules concerning insider trading. While the term often carries the connotation of illegal activity, corporate insiders can legally buy, sell, or trade stock in their company if they notify the SEC. Insider buying is legal as long as the buyer is using information that is readily available to the public.
βββββββββββ
π° @Exchange πͺ | π @Value π
π΅ WHAT IS AN INSIDERβ
βΆοΈ "Insider" is a term describing a director or senior officer of a publicly-traded company, as well as any person or entity, that beneficially owns more than 10% of a company's voting shares. For purposes of insider trading, the definition is expanded to include anyone who trades a company's shares based on material nonpublic knowledge. Insiders have to comply with strict disclosure requirements with regard to the sale or purchase of the shares of their company.
βββββββββββ
π° @Exchange πͺ | π @Value π
π΅ EXAMPLE OF A DAISY CHAIN
βΆοΈ In the mid-1990s, the (Securities and Exchange Commission) SEC brought and settled a regulatory action against a registered representative (RR) of a registered broker/dealer (BD). The SEC alleged that for a period of about three months, the RR had generated virtually all of the retail demand for a particular stock and controlled the supply, such that demand always exceeded supply.
βΆοΈ By doing so, the RR was able to control the artificially high price at which shares of the stock traded in the market. The RR engaged in daisy chain trading with market participants to fill retail customer orders, inducing BDs to enter arbitrary quotes, and marked the close by orchestrating end-of-day trades executed at or near the day's high price for the security.
βΆοΈ The BD was alleged to have been involved in the fraud by encouraging its other RRs to cold call their customers to solicit purchases of the stock. The representative was barred for life from the securities industry by the National Association of Securities Dealers, Inc. (NASD, now the Financial Industry Regulatory Authority or FINRA). The BD was expelled from NASD, while the SEC fined the firm $250,000 and the RR $175,000, and ordered ordering restitution in the amount of $536,921. Several states also took regulatory action against the BD and the RR.
βββββββββββ
π° @Exchange πͺ | π @Value π
π΅ DAISY CHAIN IN REAL ESTATE
βΆοΈ In real estate, a daisy chain occurs when a wholesaler signs a contract with a seller and then assigns the contract to another wholesaler, who then does the same. A real estate wholesaler is in the business of finding under-priced real estate, obtaining a contract on it, and then finding an interested buyer (usually another wholesaler), adding an assignment or finder's fee to the price.
βΆοΈ Each wholesaler who assigns the contract to the next wholesaler also marks up the price. The wholesaler profits when the ultimate buyer pays the sale price plus the extra fees. The seller gets its sale price while the wholesalers get the fee. The risk to the chain of wholesalers is that the ultimate buyer will buy from the first wholesaler because it offers the lowest sale price, and the deal will be consummated without informing any of the others in the chain.
βββββββββββ
π° @Exchange πͺ | π @Value π
π΅ HOW A DAISY CHAIN SCAM WORKSβ
βΆοΈ A group of investors teams up to create a daisy chain by purchasing long positions in a low-priced and thinly traded small-cap stock. The group of investors, who normally have a significant influence on the public markets, publicly disseminate faulty or misleading information that encourages other investors to believe the stock is a good investment. Public investors take the information presented at face value and use it in an investment decision to purchase shares of the small-cap stock. This actvity increases its trading volume and demand above normal levels and thus increases its price.
βΆοΈ The group of investors associated with the daisy chain then waits until the small-cap stock reaches peak levels and sells its long position. The original investors realize a profit on the sale and then subsequently stop the false marketing campaign, allowing the stock to return to normal volume and value levels.
βΆοΈ For example, Broker I will buy a stock at $50 and sell it for $60 to Broker II, who is also part of the daisy chain. The second broker then sells the stock for $70 to another broker whoβs in the chain. Broker I will then buy the stock back at the end of the day for $60. Someone who isnβt part of the chain will see that the stock sold for $60 during the day and, thinking itβs a good investment because of the $10 price increase, will jump in to purchase the stock.
βββββββββββ
π° @Exchange πͺ | π @Value π
π΅ UNDERSTANDING A DAISY CHAIN
βΆοΈ Investors who are unsophisticated and do not look carefully at a stock are usually the victims of a daisy chain. As a stock rises due to the artificially increased volume, investors who do not do their homework are attracted to the stock because they want to participate in the rising price.
βΆοΈ These investors are typically caught owning a stock that continues to depreciate long after the daisy chain operators have sold out their positions for a profit. In fact, sometimes these unsuspecting investors increase their positions as the stock prices fall, thinking they are buying a dip, only to find the stock will never again reach its unnatural peak.
βββββββββββ
π° @Exchange πͺ | π @Value π
