Insider trading terrorism

by on April 21, 2017 at 12:58 pm in Current Affairs, Economics, Law, Sports | Permalink

German police arrested a man on Friday suspected of detonating three bombs that targeted the Borussia Dortmund soccer team bus in the hope of sending the club’s shares plummeting and making a profit on an investment, prosecutors said.

In a statement, the federal chief prosecutor said the 28-year old man, a dual German and Russian national identified as Sergei V., had bought options on Borussia Dortmund’s stock before the attack.

The team bus was heading to the club’s stadium for a Champions League match against AS Monaco on April 11 when the explosions went off, wounding Spanish defender Marc Bartra and delaying the match by a day.

Prosecutors last week expressed doubts about the authenticity of three letters left at the site of the attack that suggested that Islamist militants had carried it out.

The prosecutor’s office said the suspect had bought 15,000 put options, or contracts giving him the right to sell Borussia Dortmund’s shares at a pre-determined price, on the day of the attack, using a consumer loan he had signed a week earlier.

Here is the full story at Reuters.

1 Whatever April 21, 2017 at 1:17 pm

There was a similar incident with Wal Mart (or maybe Target?) recently if I remember correctly

2 Thiago Ribeiro April 21, 2017 at 1:18 pm

The first man who, having bought a soccer team, bethought himself of saying “this is mine”, and found people simple enough to believe him, was the real founder of civil society. From how many crimes, wars and murders, from how many horrors and misfortunes might not any one have saved mankind, by crying to his fellows, “Beware of listening to this impostor; you are undone if you once forget that the fruits of soccer belong to us all, and soccer itself to nobody”.

3 The Other Jim April 21, 2017 at 1:36 pm

You mean Third World Kickball, right?

4 Thiago Ribeiro April 21, 2017 at 1:44 pm

No, I mean the greatest spetacle on Earth, real football, i.e. a game one plays with one’s might feet, not with this hands cop out.

5 Thiago Ribeiro April 21, 2017 at 1:44 pm

* greatest spectacle

6 Boris_Badenoff April 21, 2017 at 2:30 pm

American sports like basketball & football are too rough for the delicate, baseball requires thinking, and some just like to watch grown men run around in short pants for fun (not that there’s anything wrong with that).

We have so much, it’s the least we can do to let the world’s huddled, wretched masses have one stupid game they can go watch and urinate on each other in the standing areas. It would be nice if they’d keep it to themselves, of course, & not seduce our public schoolchildren with it, sapping our vital national fluids.

7 Thiago Ribeiro April 21, 2017 at 2:34 pm

Football, the real one, played with feet, is the Kings’ Sport. It is the most virile sport mankind has ever known. In fact, a primitive version of the game was played by Native Brazilian warriors as training for the war.

8 Ricardo April 21, 2017 at 3:13 pm

And did the native Brazilian warriors’ 4-4-2 turn out to be effective against Portuguese guns?

9 The Other Jim April 21, 2017 at 3:24 pm

>the Kings’ Sport.

Well, there’s your problem right there.

The fools who worship Kings deserve what they get. Including a national sport that is like trying to watch grass grow, except that you can’t, because there are soccer players in the way.

10 Thiago Ribeiro April 21, 2017 at 3:27 pm

Enough that the Portuguese recruited local allies to battle hostile indians. One of the most famous of them, Arariboia, founded a neighborhood close to my birth city. Also, they provided our people with the example of their indomitable courage, that helped to give shape to Brazilian character. A famous Brazilian chief replied when a German prisoner of his asked to not be eaten because “men do not eat men”: “I am not a man, I am a jaguar”.

11 CL April 21, 2017 at 3:31 pm

“A famous Brazilian chief replied…”

You mean when Brazil got eaten alive 1:7 in 2014, right?

12 Thiago Ribeiro April 21, 2017 at 3:36 pm

“The fools who worship Kings deserve what they get. Including a national sport that is like trying to watch grass grow, except that you can’t, because there are soccer players in the way.”
Not teue, it a game fort the thinker, for the strong-minded, for the brave. It is a game for the the misfits, the rebels, the troublemakers, the round pegs in the square holes, a game for those who can make one heap of all their winnings and risk it on one turn of pitch-and-toss, and lose, and start again at their beginnings and never breathe a word about their loss. “International football is the continuation of war by other means.”
—George Orwell

13 Thiago Ribeiro April 21, 2017 at 3:38 pm

No, maybe when Brzil crushed the Huns, as we did in WW II, to conquer our unprecedent Gold Olympic Medal. We already have five World Cups.

14 CL April 21, 2017 at 3:50 pm

Your two best players by far (Thiago, Neymar), who were in great shape at that time, were missing. That was really bad luck. So I’ll give you that. Would have been a different game with them on board. But that’s all way too OT now, so I’ll leave it at that.

15 Ali Choudhury April 21, 2017 at 3:05 pm

Baseball is basically a crap version of cricket, American football is two lines of sofas crashing into each other (rugby is a much manlier game in any case) and basketball is only worthwhile for the Harlem Globetrotters.

Ice hockey is alright though.

16 Jeff R April 21, 2017 at 5:03 pm

What makes cricket better than baseball, in your opinion? I’m a lukewarm baseball fan, but I know nothing about cricket.

17 Ali Choudhury April 22, 2017 at 1:56 am

In brief, it offers a lot more in terms of strategy and tactics as variables such as the condition of the pitch come into play and teams can contain players with a much wider range of skills.

18 David Graeme April 22, 2017 at 10:57 am

Cricket also offers the chance for some spectacular sportsbabble, quite beyond baseball and, in the hands of a master, a pure art form: “Jenkins lunged forward from the popping crease and took the googly high, hooked it round and nearly drove it down square leg’s throat” sort of thing.

19 Ray Lopez April 21, 2017 at 1:58 pm

In South America an entire war was once started over a lost football match.

As for the article, I think some backers of the 9-11 terrorists also shorted airlines.

20 62656 April 21, 2017 at 2:25 pm

The Football War was El Salvador against Honduras in 1969

21 Anon April 21, 2017 at 5:28 pm

A famous Brazilian chief replied when a German prisoner of his asked to not be eaten because “men do not eat men”:

Chief or chef?

22 Thiago Ribeiro April 21, 2017 at 6:00 pm

It is a common doubt. He was a chief, as in Chief White Horse for instance.
He could not be a chef, as far s I know his tribe te their prisoners raw and with no preparations whatsoever. Like the Spartans and the Stoics, they favored a natural life without all the whistles and bells of affectation. I am rather proud of the lifestyle of those spiritual forefathers of our nation. Their spirit will always live with us, each brazilian is a jaguar, too.

23 rayward April 21, 2017 at 1:19 pm

Consider the investment possibilities if one is president. Not that any president would exploit her position in that way, but it must cross the mind. Would it be called Presidential Trading Terrorism?

24 Moo cow April 21, 2017 at 1:57 pm

We will see how it goes in France this weekend.

25 Chuck April 21, 2017 at 2:03 pm

Buying put options before a terrorist attack. Where have I heard that before?

26 Dangerman April 21, 2017 at 2:07 pm

Old idea, has been used in a Bond film.

27 Boris_Badenoff April 21, 2017 at 2:32 pm

Not a bad plan. If his plan went south, he wasn’t going to have to repay the loan anyway. Had it worked, he’d be in Vegas, baby!

28 CL April 21, 2017 at 3:38 pm

It’s actually a really bad plan. German media says he even got reported by his very own bank. Most likely because buying put options in grotesque amounts right before such an attack *might* be a bit suspicious.

29 gab April 21, 2017 at 4:38 pm

Definitely a well-thought out plan with limited chance the authorities would be able to track him…

30 msgkings April 21, 2017 at 5:03 pm

Yet another data point to prove that almost all criminals are total idiots. Not really any Lex Luthors out there to worry about.

31 So Much For Subtlety April 21, 2017 at 7:00 pm

Freeman Dyson was involved in a project in World War Two to add some armor to B-17s. He studied a lot of B-17s that had come back shot up. He found they had bullet holes everywhere – in the wings, in the rudders, in the nose, everywhere – except a part of the belly where the wings were joined together.

So he told them to armor that part of the plane.

In the same way, criminals who get *caught* are often stupid. That is a sub-set of all criminals.

32 mkt42 April 21, 2017 at 8:43 pm

Dyson did indeed work in Patrick Blackett’s Operational Research Section, brilliant men doing brilliant work. But the work with censored data to solve the armor-on-bombers problem was done by Abraham Wald in the Statistical Research Group, also a group of brilliant men doing brilliant work (Wald, Milton Friedman, George Stigler, W. Allen Wallis, Leonard Savage, etc.).

This article in the American Mathematical Society attempted to show that the Wald story is an urban legend, but documentation from Wallis and Stephen Stigler convinced the author that the Wald story is correct after all.

And Dyson on the ORS, lots of fascinating war-winning stuff but not armor on bombers:

33 msgkings April 22, 2017 at 1:29 am

@SMFS: Good point.

34 Peldrigal April 24, 2017 at 8:46 am

The cavalier attitude with which he discusses committing a major war crime is absolutely stunning.
I wonder if he tries to rationalize what he did, or he was just a cold-hearted bastard.

35 Bill April 21, 2017 at 5:52 pm

Is this any different than an Arab nation wishing that a rival Arab nation would be put on a terrorism list so that its rival’s oil could not be sold and would be shut in.

36 Thiago Ribeiro April 21, 2017 at 5:55 pm

The perfect crime is the one no one notices. Also, there are more,profitable carreers for the Lex Luthors of the world.

37 dearieme April 21, 2017 at 5:56 pm

At last, a Russian conspiracy I can believe in.

38 Cooper April 21, 2017 at 7:30 pm

I’m surprised this sort of thing doesn’t happen more often.

It is shockingly inexpensive to sabotage a company and profit from the drop in their stock price.

The 2015 E Coli outbreaks knocked 30% off Chipotle’s market cap in a few months. How difficult would it be to find out which farm supplies spinach to X Company and then pay a couple illegal immigrants $10K/each to poison a couple packages of lettuce?

39 Boonton April 21, 2017 at 9:27 pm

I suspect harder than you think.

40 Thomas April 21, 2017 at 10:01 pm

Wonder how Diablo Valley is doing after your compatriot assaulted a man on camera with a metal object? Always remember that that is who you are.

41 Boonton April 22, 2017 at 7:18 am

Not really sure what that is about or where it came from.

42 Boonton April 22, 2017 at 10:07 am

Here’s why I think it would be harder than you think.

First, to work you need a large market player where someone taking a large short position wouldn’t attract much attention. Chipotle would work.

Second, you need a large attack. One McDonald’s having a report of food poisoning is likely not even to make the local papers. Thousands will.

The attack needs to be such that it isn’t obviously terrorism or staged. If it is you can be caught but even beyond that the public may sympathize with the victim company and it may go up in price, not down.

This requires a complicated attack plan and the more complicated something is, esp. something where you have few opportunities to do ‘dry runs’, the more places for it to break down. For example, are the farm’s Chipote sources its lettuce from dedicate only to them? If they sell to lots of places you’ll just create a general outbreak. In the supply chain food is washed so there’s a chance no one will get sick…unless you go higher up the supply chain. If some people do get sick, it will initially seem like a local story. It will be a while before it will be put together that this is a national trend as opposed to lots of local incidents. There’s a risk that those infected will come and go before it even makes a national story that will hurt the company….that means you have to be prepared to sustain the story by keeping up a steady stream of contamination long enough for public health and the media to pick up on it. In the meantime your costs are going up and what would have been a huge windfall starts to look smaller.

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