$70M in 60 Seconds: How Insider Info Helped Someone 28x Their Money
479 comments
·April 12, 2025hdevalence
rschneid
The consolidate audit trail regularly has millions of errors within a day... It's far from complete data; here's their latest report card:
https://catnmsplan.com/sites/default/files/2025-04/04.01.25-...
Also, CAT is run by CATNMS, LLC which was created in response to an SEC rule 613, however it is operated by the same consortium of SROs that it purports to provide oversight on...
All these layers of responsibility diffusion and a notable absence of penalties for failing to meet rule 613 guidelines mean that rule is little more than for show.
rvba
The prosecutors dont need any spy tool to check who did the trade (at least officially). They can simply ask to receive the records / logs.
sebasv_
What would determine whether the SEC will investigate for insider trading? I would expect them to be shielded from executive pressure.
tdb7893
Who would be doing the shielding? The current US government has been operating under the assumption of an incredibly expansive executive power, even over "independent" agencies.
I'm not a legal expert at all but so far the most useful mental model has been to assume absolutely no one is shielded from executive power (including organizations and people entirely outside the federal government) unless the courts have delivered a final ruling on it.
mjd
How would a final court ruling shield someone from executive power? The court relies on the executive to enforce its decisions. They can find a person in contempt, and order fines or jail time until that person complies, but I believe the orders are then enforced by U.S. Marshals, who are executive appointees.
This is a serious question. What have I missed?
pulisse
> I would expect them to be shielded from executive pressure.
In the past month the SEC has stopped most enforcement actions involving crypto.
hurtuvac78
The president nominates the SEC chair, and can fire him.
This explains how, written just before Trump assumed power:
While he can't force Gensler to step down as a commissioner at the U.S. Securities and Exchange Commission, he can name a new interim SEC chair as soon as he's inaugurated on Jan. 20. He can also nominate a new commissioner to the Senate, which has to confirm the pick.
https://www.coindesk.com/policy/2024/11/07/heres-how-quickly...
And Gensler resigned as Chair as soon as Jan 20th:
jibal
"I would expect them to be shielded from executive pressure."
Such an expectation was rational prior to 2025-01-20. Since then it's been completely counterfactual.
dboreham
When the criminals get root access...
hattmall
Questionable if there is anything to investigate, definitionally you can't inside trade an index fund.
Frost1x
If you’re POTUS or closely related to POTUS with access to sweeping information about erratic tariff policies that actual do shift entire markets index funds index against, why couldn’t you?
In general I think you’re correct because the “inside” information is typically not as broad or powerful. But I don’t think we live in general times. If POTUS gave me personally a heads up about such adjustments on tariffs, after watching indexes tumble after announcing them, and knowing the opposite direction, I would dump almost everything I had access to in such stocks largely effected by reevaluation from tariffs.
Knowing major policy shifts before they happen from one of the powerful governments in the world is useful information, especially when the policies are being set by a handful of people who can limit access to knowledge escaping even more than regularly so markets don’t adjust from larger sets of insider information.
Now is it really considered “insider” trading in this case? Probably not, and this administration can get away with anything it seems.
spwa4
That's the whole point. It CANNOT have been someone inside all 500 companies. It wouldn't make much sense because those companies did not do anything at the time. It was president Trump's tweet that moved the market. So it can only have been someone that new of Trump's announcement hours before he made that announcement.
rco8786
Why would you expect that?
daedrdev
In this administration they will be fired for cases Trump doesnt like. Who would protect their independence, Congress? The house members will not oppose any trump policy unless the US is in a depression due to his action
vkou
At this point, it's not clear that they would oppose him dropping a nuclear bomb on Ohio.
mullingitover
No economic system is functional without a bunch of compromises, and capitalism needs strong regulations as a check to keep it from turning absolutely rotten.
We're witnessing the removal of all of the guardrails, traffic signals, road maintenance crews. The highway patrols have been replaced by organized teams of highwaymen.
It'll get a lot worse before it gets better.
consumer451
I recently read someone's comment here stating that "trust is efficient."
What we are witnessing is the devolution of the USA from a high-trust to low-trust business environment. "Low-trust business environment" is the euphemism we have used to describe other countries, where corruption is rampant. This is so sad to watch.
rapnie
Not just sad to watch. Would a country with a low-trust business environment be allowed to have such a huge mountain of government debt, and continue to have its currency be the world's reserve currency? A lot of sadness hinges on those considerations.
drekipus
Roots of which started way back earlier than 2001 even..
eru
It depends on what you mean by 'strong regulations'. Regulations that are on the books should be enforced as written. In that sense I agree. But it doesn't mean that we actually necessarily need all the regulations that are on the books to stay on the books.
Eg, it would be perfectly fine to make insider trading legal by law. (And in fact, the definition of insider trading in the US differs a lot from the one used in France. So there are lots of things that have long been legal in the US that would have been illegal in France, without the economy collapsing.)
I agree that random enforcement of some regulations but not others depending on the whim of the executive is less than ideal.
pineaux
You could make insider trading legal by law, but that would destroy a lot of the stock market because all non-insiders would basically set themselves up to be ripped off.
Epa095
> So there are lots of things that have long been legal in the US that would have been illegal in France, without the economy collapsing.
Who knows, maybe we are in the middle of the resulting collapse now ;-)
delusional
> It'll get a lot worse before it gets better.
Importantly, there's no guarantee it's actually going to get better. We like to pretend that human existence has some trajectory towards "justice" or "prosperity". I don't think that impulse does us justice.
Stalin/Lenin could have won. Hitler could have won, Napoleon could have conquered and held. It could just get worse.
johanvts
Oppression and corruption is expensive. Systems based on them are not going to be competitive in the long run.
autobodie
Lenin did win.
astral_drama
> It'll get a lot worse before it gets better.
If they're getting away with it, they'll do it again. The tariffs were paused for 90 days. The plan is to run the same playbook in 90 days.
labster
Why do you trust that they will actually wait 90 days to run the same playbook? There’s nothing stopping Trump from reneging on his 90 day tariff pause.
Almondsetat
Capitalism actually thrives where there is only 1 regulation: total transparency. After all, if we go by the classic definition of free market competition we have customers who have perfect knowledge of every product and the products are very similar and etc. etc.
Who cares if someone at the WH does insider trading? In a transparent system people would be able to trace back every transaction and realize something is brewing and they could act accordingly.
wesselbindt
> could act accordingly
Concretely, what are you thinking of here?
formerly_proven
This is poor bait, even for 2025 HN standards.
EasyMark
who cares? I care, I want insider traders to go to prison for multiple years. That's not a free market, that's a market of those who know things to manipulated the rest of the market into never ending pump and dump schemes.
maxbond
Is this really SEC's bailiwick? Aren't options commodities (and so regulated by CFTC)?
dragonwriter
No, options are derivatives and are, in the US, generally regulated by the body regulating the underlying asset; stock/index options are regulated by the SEC, commodities options by the CFTC.
shawabawa3
Options are not commodities
They're a derivative, so options of equities are equities and I guess options of commodities are commodities
manuelfcreis
Neither! Options are derivatives, which are also regulated by the CFTC
more_corn
Are you suggesting that the SEC won’t investigate this obvious insider trading because it came from someone in his inner circle? Big if true.
richardw
You keep the receipts for about 4 years and you speak up one minute after the government changes. You get it done long before the following election.
eru
With a bit of luck, you only have to wait for 2 years, when Congress changes hands.
mattkevan
Bold to assume there are going to be elections.
All it needs is some kind of emergency, genuine, imaginary or self-inflicted, and ‘Oh no, we can’t possibly hold elections until our time of national crisis is over.’
labster
And with a lot more luck, the election results will be recognized as legitimate.
readthenotes1
Assuming the President doesn't pardon you for all crimes committed from 2008 until 2030...
adolph
Could a president pardon everyone for all time?
Or maybe just all future times: the Court has indicated that the power may be exercised at any time after [an offense’s] commission,8 reflecting that the President may not preemptively immunize future criminal conduct.
https://constitution.congress.gov/browse/essay/artII-S2-C1-3...
EasyMark
the president can't pardon you for crimes in the future. Any lawyer would get laughed out of court and possibly charged with murder of the judge who first heard it because he laughed so hard his heart stopped.
testing22321
That same day after market close Trump directly told us it was insider trading AND who dun it.
He literally bragged that his friend made 2.5 billion and the other 900 million that day.
https://www.reddit.com/r/PublicFreakout/comments/1jvyryz/tru...
bhouston
You are inferring too much from that comment. I think those people just had large stock holdings in general and were he market went up a lot that day.
testing22321
The market briefly went up 7% that day.
To make 2.5 billion just from holdings they must have had stock holdings of 35 billion. Then the next day they lost a lot more than that. I doubt it very, very much.
dist-epoch
There is a difference between making 2.5 billion because you owned stocks and the market went up and making 2.5 billion because you bought just before the market went up and then you sold.
throwaway3b03
It's unlikely you can make 2.5 billion with a single unleveraged trade. The market went up by what, 6-7% that day? Nobody bets his whole net worth on this to make a profit like that. So I think leverage was definitely involved, which just shows that insider info was definitely there.
ctippett
404 Media reported a story on Monday[1] about a news outlet that claimed there'd be a 90-day break on tariffs for all countries besides China. This was published a few days before the official announcement.
So someone, somewhere, knew something before everyone else.
[1] https://www.404media.co/benzinga-news-service-that-falsely-r...
w10-1
Good cover: publicly release a rumor via a random tiny outlet (along with a flurry of other rumors). Then if questioned, just say you heard it there.
tirant
Benzinga is not a tiny outlet at all. There’s quite some trading platforms that distribute their news to their customers, like Interactive Brokers.
tradethedelta
Benzinga has probably 40 writers or so. And they do syndicate out to other platforms. They also sell their real-time web traffic and ticker attribution data to hedge funds who will trade on the info.
null
Quarrel
These sort of trades happy fairly regularly, before market breaking news in individual stock names.
Just search for SEC insider trading cases. When they happen in options they are often pretty obvious unless the market is moving with real momentum the same way, and even then, option sellers will report you if they think it is suspicious. (By obvious, I mean, regulators should start asking questions - of course there can be a multitude of reasons.)
The difference here is that absolutely NO ONE on any side of politics seems to think the SEC & DOJ will pursue these.
w10-1
> These sort of trades happy fairly regularly
I think the post established that this volume or size of spike is unique before any market-shifting news event coming out of the government in recent decades. The "sort" of transaction is irrelevant except that it's risky and thus relatively low volume normally.
dist-epoch
> I think the post established that this volume or size of spike is unique
It did not established that. If it was so unique, the market would have reacted to this trade (before the news).
Quarrel
It's unusual for it to happen in major indices.
I said it happens in individual stock cases, but very few people / places that control major market moving news leak - and when they do they investigate the hell out of it.
Imagine if this happened 20 minutes before Jerome Powell unexpectedly dropped interest rates?
misja111
> And it wasn’t just options. At exactly 1:01 pm EST, trading volume in SPY shares themselves spiked. Nearly 2.75 million shares were bought in that single minute.
This is standard practice, it was simply the marketmaker hedging its position after just having sold those $2.5 million call options.
The math checks out; at 85 cent per piece, those were 2.94 million call options. At 9 above the spot the delta was less than one so I guess you'd need to buy slightly above 2 million shares to hedge your delta. The normal SPY trades would have made up for the remainder of the 2.75 million volume.
Shocka1
Yeah this whole article is meant to stir outrage - HN is taking the bait, but that's expected. The most proficient people in the world at logic, and they are still culpable to biases. My comment shouldn't be confused though - there is smoke, but none of this is really proof because there isn't enough evidence yet from our perspective.
A lot more details needed: - Is it a fund or individual? - Does the trader make these kind of trades regularly?
I have more questions, but those are the first questions I would start with. I trade 0 and 1 days quite a bit in SPY and have collected a lot of data and performed statistical analysis on them for several years now. I myself sold S&P futures options that morning based off my data.
My theory until proven otherwise - Trader makes smaller trades in 0 days regularly - market volatility and the state of that week gave a much higher probability that there would be an extreme reversal at the first sign of any hint of good news, which was proven by fake news of a tariff lift just a day or two before. The overall bearish sentiment also coiled the market for an extreme move to the upside. Adding even more probability, the market that day was at the same level from Monday, where it showed buyers were foaming at the mouth to buy. Trump tweets just after market open that it was a great time to buy. Probability increases even more...
Similar to a very high probability count in Blackjack, trader puts in a trade at 12 and has an exit plan for 1 or two hours later. Trader determines that worst case 50 to 75% of the trade is lost due to theta decay by 2pm. Maybe they have a stop at 40%? Best case 2 to 10x's their money due to support levels giving a small rally. They've done this before and the wins outweigh the losses. Maybe even a hedge fund or algo trader running an ML model.
In my data I've seen extremely large multi-million dollar call option plays regularly when there is market volatility like this. Until proven otherwise, everyone just needs to stop with the outrage. I'm completely willing to change my mind as more evidence comes out.
sorokod
kleptocracy
/klĕp-tŏk′rə-sē/ noun
A government characterized by rampant greed and corruption.
testing22321
A few years back the US labeled China a “state manipulator” of currency.
Surely it will only take a few more rounds of pump and dumping the entire US economy for basically every country to label the US the same, and move away from US bonds and the US dollar as reserve currency. It just won’t be stable enough with all these antics.
When it happens I just hope trump won’t use it as justification for war.
EasyMark
That seems pretty two faced given their own practices over the years.
mentalgear
The follow-up post shows the whole magnitude of the insider trading:
> My previous post highlighted a striking example: how a single $2.5 million options position turned into $70 million in under an hour. But focusing solely on that trade risks missing the larger picture. What we actually saw was widespread activity. Numerous sophisticated traders carefully placing positions across several strike prices ($504, $505, $507, $509) in SPY as well as similar trades in QQQ.
> The pattern wasn't limited to a single trade or strike price. It was a coordinated wave of positions, all established within a critical half-hour window before the news broke.
> Imagine someone purchasing thousands of lottery tickets with a specific number combination just moments before those exact numbers are drawn.
https://data-and-politics.ghost.io/this-is-what-insider-trad...
qwertox
How can the average MAGA voter which waves a little flag at a rally feel ok with this?
It's treason what they did, treason on their principles. All this in times when it was supposedly "Main Street" turn.
tomp
Is it any different, in principle, to what congressmen (and women) have been doing for decades? Insider trading, corruption, etc. has all been normalized.
barbazoo
You’re assuming they’ll even hear about it, lol.
bregma
> How can the average MAGA voter which waves a little flag at a rally feel ok with this?
Apparently most of them are just temporarily embarrassed billionaires.
ojbyrne
I imagine this is going to happen again (except 100x) when there’s a China “deal.”
null
alexey-salmin
I expected an article about AWS configuration mistake.
TheAlchemist
What's missing as information here, is how often this kind of big bets happen. It's only showing some anecdotical data on 2 days from 2008 and 2009.
I believe he's right, but would just like some more proof that it's really extraordinarily rare to place such a big bets, especially on 0DTEs (which I believe did not exist in 2008).
jmyeet
What's surprising about all this is how quickly, easily and cheaply the republic was dismantled and how little opposition there was from people in power.
This culminated in Trump v. United States [1] where unelected partisans simply invented presidential immunity completely out of thin air. That means there are absolutely no possible legal repercussions for any of this. None. And even if there were, the agencies in charge of enforcing it have either been gutted or they've been subverted by putting a sycophantic lackey in charge.
This is the new kleptocracy we live in. Nobody is coming to save us. The supposed political opposition (ie the Democratic Party) is nothing more than feckless controlled opposition who are more interested in defending US imperialism than they are in winning elections.
Things are only going to get worse.
kilroy123
I agree no one is coming to save anything.
The only people that can save it are regular people standing up and taking action.
boshomi
The following article:
»This Is What Insider Trading Looks Like«
https://data-and-politics.ghost.io/this-is-what-insider-trad...
torginus
These are just the most shameless and/or retarded people. Insiders who bought quietly spread over the day before we'll never find out about
> We don’t know who placed the trades. We don’t know what they knew.
Actually, “we”, collectively, do know, because the SEC maintains an “XKEYSCORE for equities” called CAT.
If there was interest, the government could know exactly who placed these trades. But the call (options) are coming from inside the house.