Igor Chudov @ home writes:
Which brings up another ignorant question: suppose that I am a corporate officer who does receive substantial "insider" information, for example results of audits, before they become public. What would prevent such an insider from creating a phony offshore trading company, and sending orders to that company using cypherpunks technology?
Very little. However, there would be a noticable shift in the price of the stock prior to the public information arriving. This would trigger an investigation. There would be a very limited number of people able to get at the inside information, so the pool of suspects would be small (usually on the order of a dozen people or less), and if you, say, wanted to spend your money, you might end up being caught. In other words, anonymity works better when the "crime" isn't visible to anyone watching the stock market and could be committed by more than a handful of people. Personally, I don't object to insider trading, but it can be hard to get away with depending on circumstances. Perry