Maybe I'm making an incorrect assumption, but I assumed the information was already classified. He was betting on an outcome of a planned military operation based on his knowledge of those plans. My assumption is that information is super closely guarded, and likely classified at a high level. Telegraphing your invasion plans is generally not something you do unless you want disaster, right?
“Our Office will continue to hold accountable those who misuse confidential or classified information in a way that undermines and exploits our national security.”
But isn’t wire fraud harder to prove than leaking classified facts?
Generally, to be successfully prosecuted for a crime, the prosecutor has to show that each and every "element" of the crime has to have happened. On the above page, there were 3 different court precedents who ruled what elements that the prosecutor needed to prove were in those cases.
Unless the prosecution can prove that the trades meaningfully moved the market prices, it's probably going to be really hard to use the term "leaking".
I can't shake the feeling that there may be political reasons to not even attempt that angle. What legal precedent would it set if a judge actually ruled on that and the prosecution won? Which entities within the government would be financially inconvenienced?
So in prediction markets I've heard a lot of times people will collaborate in order to make certain predictions pay off higher sums by having more people put money on a certain bet.
Is it true with these markets the more people bet on a specific day and time, the value will increase more, increasing the overall payout? If that is true, I wonder if they're looking at anybody else helping place the bets or a group of people trying to wager a higher amount of money to increase the return?
It's a bit more nuanced than that, because we're not talking about outright market manipulation. Absent any other information, the market makers always assume that they might be trading against a better informed counterparty - so absent any other signal, the prices at which executions happen are themselves a signal.
Think about it: you have N market makers offering both sides of the trade with a spread between them. When there is no other meaningful activity, the best prices are more or less stable. Now someone comes in and buys one side of the trade. Each marker maker will, individually, make the same two decisions:
1. "If you bought at that price, I should raise my price and charge you more"
2. "Since you bought at that price, I must assume you have more information and I should get out the way to avoid an expensive mistake"
The magnitude of the decisions made depends on various factors, but as a short-hand the size of the made trades in respect to the overall liquidity available near the midpoint directs how strongly the market makers react. A tiny trickle of insignificant trades does not move the price in any meaningful way (unless the sizes are so small that the execution commission starts to make a difference). A sustained directional flood of trades will cause the midpoint (and volume) to move to the direction where the market makers can sell at higher prices and avoid accumulating any further losses.
Well yes. Someone has the other side of the bet, and it’s not 1:1 long:short. That’s how folks could hypothetically hire somebody to kill me, by putting $5M on “floam will survive the month” - if I’m not killed conspirators get their money back, with interest. But if I am verifiably dead, whoever knew in advance a hit man will kill me, that man gets paid.
Maybe I'm making an incorrect assumption, but I assumed the information was already classified. He was betting on an outcome of a planned military operation based on his knowledge of those plans. My assumption is that information is super closely guarded, and likely classified at a high level. Telegraphing your invasion plans is generally not something you do unless you want disaster, right?
Yeah the DoJ proclaims,
“Our Office will continue to hold accountable those who misuse confidential or classified information in a way that undermines and exploits our national security.”
But isn’t wire fraud harder to prove than leaking classified facts?
> But isn’t wire fraud harder to prove than leaking classified facts?
No. From the Justice Department's own criminal resource manual:
> the four essential elements of the crime of wire fraud are:
> (1) that the defendant voluntarily and intentionally devised or participated in a scheme to defraud another out of money;
> (2) that the defendant did so with the intent to defraud;
> (3) that it was reasonably foreseeable that interstate wire communications would be used; and
> (4) that interstate wire communications were in fact used
https://www.justice.gov/archives/jm/criminal-resource-manual...
Generally, to be successfully prosecuted for a crime, the prosecutor has to show that each and every "element" of the crime has to have happened. On the above page, there were 3 different court precedents who ruled what elements that the prosecutor needed to prove were in those cases.
https://en.wikipedia.org/wiki/Element_(criminal_law)#
Unless the prosecution can prove that the trades meaningfully moved the market prices, it's probably going to be really hard to use the term "leaking".
I can't shake the feeling that there may be political reasons to not even attempt that angle. What legal precedent would it set if a judge actually ruled on that and the prosecution won? Which entities within the government would be financially inconvenienced?
So in prediction markets I've heard a lot of times people will collaborate in order to make certain predictions pay off higher sums by having more people put money on a certain bet.
Is it true with these markets the more people bet on a specific day and time, the value will increase more, increasing the overall payout? If that is true, I wonder if they're looking at anybody else helping place the bets or a group of people trying to wager a higher amount of money to increase the return?
It's a bit more nuanced than that, because we're not talking about outright market manipulation. Absent any other information, the market makers always assume that they might be trading against a better informed counterparty - so absent any other signal, the prices at which executions happen are themselves a signal.
Think about it: you have N market makers offering both sides of the trade with a spread between them. When there is no other meaningful activity, the best prices are more or less stable. Now someone comes in and buys one side of the trade. Each marker maker will, individually, make the same two decisions:
The magnitude of the decisions made depends on various factors, but as a short-hand the size of the made trades in respect to the overall liquidity available near the midpoint directs how strongly the market makers react. A tiny trickle of insignificant trades does not move the price in any meaningful way (unless the sizes are so small that the execution commission starts to make a difference). A sustained directional flood of trades will cause the midpoint (and volume) to move to the direction where the market makers can sell at higher prices and avoid accumulating any further losses.Well yes. Someone has the other side of the bet, and it’s not 1:1 long:short. That’s how folks could hypothetically hire somebody to kill me, by putting $5M on “floam will survive the month” - if I’m not killed conspirators get their money back, with interest. But if I am verifiably dead, whoever knew in advance a hit man will kill me, that man gets paid.
It seems strange, but that must be why I'm not a lawyer :p