Gameover for Goldman Sachs Inside Trader (Caught on Xbox 360)

Gameover for Goldman Sachs Inside Trader (Caught on Xbox 360)

by

Why do we follow the smart money? This story below should answer that question clearly for you, featuring an instance of insider trading from a well known hedge fund.

The SEC has charged a former Goldman Sachs investment analyst with insider trading, alleging he used Xbox 360 chats to pass insider information to two of his college buddies. The former investment analyst told his friend, “There’s no tracing Xbox 360 chat,” before tipping two friends off to “big financial deals.” Allegedly, the analyst and his friends were able to make at least $400,000 from the insider trading scheme before being caught.

In one instance, the Goldman employee informed his two friends that the publicly traded company “Channel Advisors” was going to be acquired, including the price that the acquisition was for, and the date. One somewhat alarming note is that the Goldman employee also used Signal and other means of more encrypted communication, and it’s unclear whether the government was able to (or would have been able to) track those communications in the same manner.  

Goldman Sachs
Insider trading
Xbox 360
SEC charges
Investment analyst
College buddies
Financial deals
Insider information
SEC investigation
Channel Advisors acquisition
Signal communication
Encrypted communication
Unusual options activity
Riches from insider trading
Zendesk trade
Acquisition news
Smart money
Option order flow
Wall Street elite
UOA insights

That very large one-day rally made this Goldman Sachs insider trader and his friends a pretty penny. Source: Yahoo Finance.

This is why we care so much about tracking unusual options activity. We know insider trading is illegal — and so did the Goldman employee. But the idea of attaining riches off of an event that you know is going to happen is often too enticing for some of these people to ignore. In a case that may have been another instance of insider trading which we caught, take a look at this Zendesk trade. We saw a massive, far OTM purchase in the little-known stock Zendesk. The options were short-dated, and priced more than 20% away from the stock price. 

Goldman Sachs
Insider trading
Xbox 360
SEC charges
Investment analyst
College buddies
Financial deals
Insider information
SEC investigation
Channel Advisors acquisition
Signal communication
Encrypted communication
Unusual options activity
Riches from insider trading
Zendesk trade
Acquisition news
Smart money
Option order flow
Wall Street elite
UOA insights

The next day, the news broke: Zendesk was getting acquired for $77.50. 

Goldman Sachs
Insider trading
Xbox 360
SEC charges
Investment analyst
College buddies
Financial deals
Insider information
SEC investigation
Channel Advisors acquisition
Signal communication
Encrypted communication
Unusual options activity
Riches from insider trading
Zendesk trade
Acquisition news
Smart money
Option order flow
Wall Street elite
UOA insights

The bottom line: This is why we follow the “smart money”. Whether this trade was made by an insider who knew about the acquisition ahead of its press release, or by an institutional trader who had access to powerful research tools that we as individual traders can’t use, the point is the same: it’s important to keep an eye on option order flow. It’s the only way to get inside the minds (and wallets) of the Wall Street elite.

Want more UOA insights, including technical analysis on recent UOA trades and professionally crafted trade ideas? Try a month of UOA today.

Monthly
Annually

UOA Essential

Monthly Membership

$

199

/month

Cancel Anytime

See Terms of Use for details.

UOA Pro

Annual Membership

$

3,495

/year

Billed Annually at $3,495

Full 30-day money back guarantee on annual subscriptions. See Terms of Use for details.

UOA Essential

Monthly Membership
Call for Pricing
(888) 809-8058

See Terms of Use for details.

UOA Pro

Annual Membership
Call for Pricing
(888) 809-8058

Full 30-day money back guarantee on annual subscriptions. See Terms of Use for details.

UOA Essential

Annual Membership

$

995

/year

Billed Annually at $995

Full 30-day money back guarantee on annual subscriptions. See Terms of Use for details.

UOA Pro

Annual Membership

$

3,495

/year

Billed Annually at $3,495

Full 30-day money back guarantee on annual subscriptions. See Terms of Use for details.

UOA Essential

Annual Membership
Call for Pricing
(888) 809-8058

Full 30-day money back guarantee on annual subscriptions. See Terms of Use for details.

UOA Pro

Annual Membership
Call for Pricing
(888) 809-8058

Full 30-day money back guarantee on annual subscriptions. See Terms of Use for details.

Subscribe to Rebel Roundup for your weekly digest of market highlights and free trading lessons.
We’re on a mission to empower retail traders with the tools they need to succeed.

Join a growing community of traders with Market Rebellion

Join the thousands of users daily!