By Ann C. Logue
Toilet paper manufacturers weren’t the only beneficiaries in Covid’s early days. At Twilio, a few engineers noticed that customers were using the company’s communication services far more than before. They worked in the billing department, so they knew just how much higher revenue was going to be.
They could have enjoyed the happy news that they would be able to keep their jobs amidst economic turmoil and record unemployment, but they were too greedy for that. The SEC alleges that they tipped friends and relatives and placed their own trades through other people’s accounts. Between stock and call option purchases, the group apparently made $1 million when Twilio reported its quarterly earnings in May 2020.
These dudes didn’t even try to be creative. They even had a group chat going. The conversation was in Telugu, a language spoken in India. Guess what? Google Translate supports Telugu to English translation. That trick worked for the Navajo Code Talkers during World War II, when Diné soldiers used their own language to send messages. The Nazis couldn’t figure out how to translate or break the code, but now their secret is enshrined in history. (Google still doesn’t support Navajo translation.)
The SEC will keep going after insider trading, but commission has other priorities. This week, it released more proposed rules on Special-Purpose Acquisition Companies and its examination priorities. They will be looking at projections given in SPAC mergers, custody for crypto assets, and information security, among other issues.
This doesn’t mean that the SEC is ignoring insider trading. As long as greedy people think they are smarter than they really are, SEC investigators will find insider trading schemes.
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