They're only "obvious" frauds if I'm sitting here writing a paragraph describing it like one.
There is a global feed of press releases that companies release into, and the average HN commenter is incapable of distinguishing frauds from real better than anyone else. The executives that make these press releases use different language that doesn't describe it as fraudulent, and this makes it non-obvious.
If the "trading profit" is the only signal you have, I'm sure Goldman Sachs can come up with a way to make it less obvious than "buy lots of short-term expiring put options on your own company". You can't look at only the obvious case - you have to look at all possible things all finance people can do and rule out any possibility of profiting from a downwards movement that was engineered. Otherwise, they will profit from the gaps in your ability to detect them.
In order for something to be a crime, it has to be proven "beyond reasonable doubt". Say with 90% certainty. That is, 2 bits of certainty. But you can make a trading profit while leaking 1, 0.5, or 0.1 bits of certainty. It is extremely difficult for non-specialists to detect a trade pattern based on a leak of 0.1 bits of certainty.
Insider trading isn’t the only potential motive for an action like that. A competitor could pay a mole to help them get ahead by taking down the competition, for example. I’m skeptical that insider trading law plays a significant role in preventing schemes like this from occurring. The entity with the strongest incentive to prevent a company from being sabotaged is the company itself. Insiders can complain to regulators or prosecutors if they think something like this is happening, and that’s pretty much the only way they’d find out.
There is a global feed of press releases that companies release into, and the average HN commenter is incapable of distinguishing frauds from real better than anyone else. The executives that make these press releases use different language that doesn't describe it as fraudulent, and this makes it non-obvious.
If the "trading profit" is the only signal you have, I'm sure Goldman Sachs can come up with a way to make it less obvious than "buy lots of short-term expiring put options on your own company". You can't look at only the obvious case - you have to look at all possible things all finance people can do and rule out any possibility of profiting from a downwards movement that was engineered. Otherwise, they will profit from the gaps in your ability to detect them.
In order for something to be a crime, it has to be proven "beyond reasonable doubt". Say with 90% certainty. That is, 2 bits of certainty. But you can make a trading profit while leaking 1, 0.5, or 0.1 bits of certainty. It is extremely difficult for non-specialists to detect a trade pattern based on a leak of 0.1 bits of certainty.