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Presenting For The SEC's Enforcement Pleasure: $21 Million In Medivation Insider Trading Profits
Medivation shares are not doing too hot: apparently if your core Alzheimer's drug (developed in collaboration with Pfizer) ends up being a failure, your stock drops by almost 70%.
Pity, because that drug may have been useful to everyone else buying the broader stock market with the hope they won't eventually suffer the same fate. Yet what is notable is that this information, which hit Business Wire at 7:30 am Eastern, was apparently good enough for someone to make a huge bet on a stock plunge just before the market closed yesterday, at 3:59pm to be specific, and to make almost $21 million on inside information.
Below, you can see the actual trades in MDVN April $40 puts, which amounted to nearly 16,000 in three unique trade blocks of 500, 4750 and 9850, just before the bell rang, at a price of $14/put.
Here is how the volume of this particular put has looked recently.
This class of puts now trades at about $27, meaning a profit of $13 per share, also meaning a total profit of 16,000*$13*100, or about $21 million.
SEC, take it away. Oh wait, we forget that most of your staffers are engaged in not policing this kind of behaviour, but looking at transvestite pornography. Oh well, we tried.
With kind gratitude to @Olivertse who first noticed this now perfectly acceptable market behavior.
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If you guys want to get rich in 2010 this is the website you need to visit. http://www.SecretTradingMethod.com
Think the finders fee that the SEC owes ZH, amounts to almost their complete budget.
Tyler make sure you send them your bill for services rendered.
The Bloomberg report of above is actually missing info. These were spreads - not only did someone make $21 on long puts, they SOLD $17.6 CALLS 16,000x as well. That's a total of $50 million insider trading (probably). Full report here: http://livevol.blogspot.com/2010/03/mdvn.html
It must have been Martha Stewart = That bitch is more dangerous that a hundred Lloyd Blankfeins
I'm really hoping someone made the deadline and paid the $50 fee for this:
http://www.pulitzer.org/files/entryforms/2010jentformbutton.pdf
ZH would get as many category noms as Avatar. "Distinguised investigative reporting, distinguished explanatory reporting, etc, etc. If only they had someone snapping photos of the squids under testimony.
I'm sure it was just a lucky guess. Why do you hate capitalism? Someone put their hard earned money to work for almost 16 hours, why shouldn't they earn a little premium on their capital? Risk is what makes this country great. No risk makes it profitable.
+ 21 million
aint that amerika?
....home of the Free Mo' Money!!!!!!!!!!!!
Nice catch.
Thanks!
Unfortunately it's not a "catch' per se. Tyler is simply the short stop pointing out the fly ball to the outfielder, who is too busy counting four leaf clovers to actually look up.
It's a "catch" when the SEC actually does something about it. Looks like another home run for the other team.
<sarcasm off>
My advice to the put buyer is to use an excuse the SEC is familiar with:
(I do wish the strikethrough function worked in the comments editor.)
Like this?
(I do wish the strikethrough function worked in the comments editor.)
Try typing what you want, highlight what you want to strike through and then hit the ABC button. That usually works if nothing else does.
Anyone smart enough to have had access to this inside information before the public and make such an obvious wager evidently could care less about reprecussions from the SEC. That scares me.
Yes, I can't imagine why anybody might be less than terrified by the SEC's exceptional diligence and ninja-quick responses to this sort of behavior.
Oh, wait.
Tylers, what is FAR more criminal is the gigantic amount of "planned sales" in MDVA prior to this announcement
http://www.form4oracle.com/company/medivation-inc-mdvn/company-transactions?id=6037
Pulling a page from Mozillo a la CFC
All you have to do now is look for the insider action and follow suit. I'm gonna try this once I start trading again.
Per the SEC: Nothing to see here.
Oh, and remind either of the two SPY traders to please turn off the lights when they are done.
yeah, and I am struggling to make $200 a day and now I know why, when thieves like these are free to plunder the likes of me and the other peasants.
fucking garbage
The SEC (or CFTC for that matter) are lame, just ask the Madoff tipster. Now if ZH could do expose HSBC, LP Morgan, etc via an article about their gold and (massive) silver shorts... (hint hint)
thats just great. Recently i bid a job at 200.00 on a ceiling repair. 4 hours of labor later i charged the lady for materials only. 35.00 was the bill. I refused to charge for labor as it was evident they were struggling. Got home and tore up the check.
The roofer i work with did the same. This is becoming more common as the days go by.
My wages appear ridiculous in the face of wallstreet millions in minutes with no real effort and nothing produced!
Why work? It makes no sense anymore.
You did a truly wonderful thing as many people are indeed struggling just to pay the bills.
Why work? It makes no sense anymore.
Many Americans have decided to take the FULL LEGAL support they are allowed by the US government. Heating oil aid, food stamps, cheap rent, free health care, free day care, etc.
Am not saying i wholeheartedly agree with the above, yet at the end of the day one may want to decide which pays more. An added benefit is that by staying home you can home school your children and spend more time with loved ones.
The choice to work or not work is yours once you weigh in the benefits...
+1
I offered a beer from a sixpack outside 7-11 to a homeless guy after filling up the tank - guy lit up like he had just won Publishers Clearing House.
Am I contributing to his homelessness? Am I cruel to give him what he wants? I can only hope someone will do the same for me in what appears to be short order. Plus, I gave him what he wanted instead of Federal Reserve Notes - cut out the middleman.
"Why work? It makes no sense anymore."
Exactly, 40M people are no longer working and this number is growing everyday.
What are they going to do with all these people they kicked to the curb? Now the only thing left is the haves and the the have-nots.
The only thing that will stop all the corruption is a complete melt-down.
Is this activity really a surprise? Inside information has been a part of the markets since the dawn of time. Efficient market theory is just that, a theory. Shame they still teach 'A Random Walk Down Wall St.' at our universities.
You say that like transvestite pornography is a bad thing.
they shoud have some kindof wistle blower law for this so you can find it and hten get something like 1/3 the take home. or if you can proove it in a civil suit, get it all
LMAO. Nice backhanded slap at Goldman, Tyler.
MMMM Tranny Porn!
*FAP FAP FAP FAP*
But Tyler, what do you mean 'insider' trading?
Isn't there some other label to use when the traders are actual employees of the SEC?
However, I do want to congratulate you on finding a market behavior that follows non manipulated rules...with regard to that 70% stock drop.
See, the SEC and the PPT blew it. The stock should have gone UP on news the core product was a failure.
-MB
Who cares if someone trades on insider information?
The rules are bs anyway.
Better for Zerohedge to speak truth to power (as you do well), than to assist the federal government make criminals out of its citizens, by using power that it should never have been given in the first place.
Zero Hedge
This is an example of just what a closed shop it all is...
and I have personal experience from more than one director who has ripped me off.
A company with one director owes me money, I won the court case but he still has not paid up. I phone Companies House... sorry not their problem.. even though he is overdue to submit accounts.
I ring Institute of Directors... I want to complain about a director... sorry are you a member? No.. I want to complain about a director... sorry you are not a member... you have to pay or be a member to complain about a director....
I say, no wonder royal bank of scotland is now owned by the government and we are all in a mess, this is a closed shop and hung up in disgust
TD - Should put up a running tally of all the insider jobs you've come across vs which ones the SEC has or has not investigated. Scoreboard style
Since it was done @3:59 I'm guessing it was some long trying to get the condom on fast.
Perhaps market maker(s) protecting their inventory or preparing for today. Where's the guy that took the other side of the option trade?
when did Bernie Madoff join the SEC as an enforcer? i thought he was still buying sex in prison with cigarettes.
when did Bernie Madoff join the SEC as an enforcer? i thought he was still buying sex in prison with cigarettes.
Does it count if its FDA insiders, they're new to the game but that deficit ain't going away soon. These look like payments in kind to people with elite status and the blessing of the Oligarchs. Blackwater comes to mind
Just abolish the sec already (along with the post office, btw). Outsource the sec to 4 or 5 firms (including zerohedge.com). Give them 5-20% of what they find depending on amount. This is rediculous.
Don't be so hard on the SEC. This SEC employee seems to have his "hands full".
http://dealbreaker.com/2010/03/sec-supervisor-surfed-tranny-porn-to-cope...
Just like Al Quaeda fighting a war on bicycles with hand-made bombs, or Charlie fighting a war in tunnels, this economic civil war will be fought by two unequal sides.
The little guy might choose -rather than trust the SEC, Barry O, Timbo, or Barney and Ben to ride to the rescue and protect the voters- to use the only weapons he/she has at hand.
Repudiate the mortgage, sign up for all the unemployment benefits available, and withhold the taxes. The system will crumble.
Mighty powerful weapons, difficult to fight against.
Tyler,
I believe we can all take advantage of this. I do not have such a trading platform but do not some come with alerts for trading volume? I assume it is also available on options trading volume spikes. Am I wrong?
The option customer got long MDVN and lost $21 million in this trade. Market makers who put the guy up were the winners.
When the SEC reviews John V. Winfield's activity (of Bel Air, CA) with respect to Goldspring, Inc., then maybe I'll feel they have an iota of value to those they are supposed to protect.
If someone holds a majority equity stake in a company and that individual is also the sole creditor of the company, financing the company through convertible debentures, i.e. and calling (dictating) ALL the shots, isn't that person essentially increasing their equity stake at the expense of the minority shareholders? They are not putting their own money in but rather putting the minority shareholders' money in by selling shares and issuing more shares to himself.
In that scenario, the minority is getting diluted while the majority is growing its stake. Share price remains depressed as major owner sell shares into the market to raise funds to lend the company. The effect this depressed share price has upon share conversion means even more shares to the majority, even more dilution for the minority.
I'm not a securities attorney but it sounds illegal. At a minimum, not filing Form 4s is but it may go much deeper.
SEC?
I think that is a very dangerous path to follow. When you start rewarding people for finding criminality, you run a very dangerous game. Frankly, it's the reason why cops don't directly benefit from the citations they issue. It would be WAY too easy to abuse that sort of power. Despite the clownish bureaucrats, there shouldn't be another way to do this. Too risky to our personal freedoms. Would that work? Probably yes. Is there a greater risk of abuse than the current SEC system? Most definitely. That lets me know that the SEC system is better. It doesn't mean it's great, but safer for the citizens than incentivized zealotry.
I think it was Gekko!!
Denninger doesn't think it was insider trading:
http://market-ticker.denninger.net/archives/2029-Medivation-Insider-Trad...
Shit. Work stress has gotta be BAAAADDD to have to resort to tranny porn!
I did notice that the price dipped below the 200 dma
percolator, I just checked that analysis and it appears to omit one key fact; the entity involved may not have known what the information that was going to be released stated, but they apparently knew when the information would be released, and "bet" accordingly, which, unless I am naive to these kinds of things, would constitute "insider" trading.
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