Why is insider betting even a thing?

Dan Davies is a managing director at Frontline Analysts and an author. His most recent book is The Unaccountability Machine, which you can buy here and read about here, here, here and here.

The last two weeks have given UK voters reason to wonder whether British elections are regulated by the Electoral Commission or by the Gambling Commission. Several constituencies have effectively lost candidates as a result of investigations into whether they placed bets on the timing of the election based on inside knowledge, or whether they made “hedge” bets on an opponent to win.

Things have already been escalated to the Metropolitan Police. Anyone familiar with financial market regulation might be inclined to ask — why is the betting industry protected by such aggressive and proactive regulation? 

For one thing, the amounts of money involved seem to be pretty trivial. Try calling up the FCA and saying you’ve got evidence of £100 worth of insider trading but it needs to be investigated this week and can’t wait; see how you get on.

There’s also a reasonable question to be asked as to why “insider betting” should be an offence at all. The ability to have someone sent to prison for being better informed than you is a very great privilege indeed, and it’s not obvious what the bookmakers have done to deserve it.

It’s hard to believe today, but in many countries “insider trading” was not a crime until quite recently. It has been prohibited in the US for most of the 20th century but was only banned in the UK in 1980, and wasn’t a criminal offence in New Zealand until 2008.

In Lying for Money, my book about fraud, I argued that this was because insider trading is a “market crime”. Rather than being something that’s obviously against natural justice, it’s a convention or internal rule of a particular industry that’s found its way on to the statute book because that industry is so big and important.

Insider trading is not like stealing or counterfeiting; there is no Commandment which reads, “Thou shalt not use thy private information”. In most industries, finding out things that the customer doesn’t know and using this to gain an advantage is the epitome of good business. I don’t complain that my greengrocer knows more than me about the wholesale price of oranges. When I’m buying a house or a second-hand car, I accept that the vendor is

Charted: U.S. Wealth by Generation

Published

1 hour ago

on

June 27, 2024 Graphics/Design:

See this visualization first on the Voronoi app.

Charted: U.S. Wealth by Generation

This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.

In 2023, American Baby Boomers owned 52% of the country’s net wealth despite comprising only 20% of the population.

Based on Federal Reserve data, this graphic illustrates the distribution of wealth in the United States from 1990 to 2023 by generation.

Generations are defined by birth year:

Silent Generation (born before 1946) Baby Boomers (born 1946-1964) Gen Xers (born 1965-1980) Millennials (born 1981-1996) Baby Boomers Own Over Half of the Wealth

Baby Boomers are often considered one of the luckier generations in terms of timing.

Most did not experience wars and benefited from strong economic growth driven by falling interest rates, a roaring stock market, global monetary expansion, and high earnings. Consequently, this group’s wealth grew from $4.5 trillion in 1990 to $76.2 trillion in 2023.

Wealth by Generation (USD, Trillions) YearSilentBaby BoomGen XMillennial 199017.3T4.5T0.2T0 199519.9T8.6T0.6T0 200022.8T17.0T2.2T0 200527.1T29.2T5.2T0.3T 201021.6T34.4T6.0T0.5T 201521.4T48.4T13.0T1.9T 202019.3T66.2T31.3T7.2T 202319.7T76.2T37.8T13.5T

Meanwhile, Gen X’s share of American wealth rose from 15% in 2013 to 26% in 2023. In contrast, with most of the cohort over 80 years old, the Silent Generation saw its share of the national wealth total drop from 79% in 1990 to 13% in 2024.

Contrary to their ‘broke generation’ label, millennials have defied expectations. They saw their wealth reach historic highs after the COVID-19 pandemic, amassing more wealth by their 40s than previous generations. In a significant leap, millennials’ share of wealth in America increased from a modest 1.4% to a promising 9.2% between 1990 and 2023.

If you enjoyed this post, be sure to check out this graphic, which shows the retirement savings that Americans currently hold.

Healthcare-focused PE firm Martis Capital Management opens third office in Miami

US healthcare-focused private equity firm Martis Capital Management has opened an office in Miami, marking its third location after Washington, DC and San Francisco. 

As part of the opening in Coconut Grove, Martis has added Beth Dresdale as a principal on its value creation team and David Muckey as a director on its investment team. 

Dresdale was previously a principal at Incline Equity Partners. She also led sales and commercial operations at healthcare services company A Place for Mom, having started her career at McKinsey & Company and Centerview Partners. 

Muckey previously served as a vice president at Gemspring Capital and a vice president at Vector Capital, having started his career at Lazard Freres & Co. 

Retail traders came out in force to buy the recent dip in AI darling Nvidia

Shakespeare’s forgotten legacy: hyperbolic numbers

There is a theory that Shakespeare was an accountant. How else to explain the detailed use of bookkeeping metaphors in his writing? “We shall not spend a large expense of time/ Before we reckon with your several loves,” declares Malcolm in Macbeth, “And make us even with you.”

The jailer in Cymbeline compares the hangman’s noose with an accountant reckoning the credits and debits of the condemned man’s life. And The Comedy of Errors refers to a debt as a “thousand marks”, a unit only used by book-keepers in Elizabethan England.

Yet Shakespeare seems to have been rather loose with his economics. Rob Eastaway’s new Shakespearean mathematical miscellany, Much Ado About Numbers, tells us that Shakespeare put Dutch guilders in Anatolia in The Comedy of Errors, situated Italian chequins in Phoenicia in Pericles, described Portuguese crusadoes in Venice in Othello and had Julius Caesar’s will bequeathing Greek drachmas to every Roman. There is something to be learnt from Shakespeare’s attitude to numbers (besides that he’s a poor guide to foreign exchange markets).

As Eastaway explains, Shakespeare’s works are richly adorned with numbers. Hamlet’s “thousand natural shocks/ That flesh is heir to” is just one of more than 300 instances of the word “thousand” in Shakespeare’s work. We are not meant to hear Hamlet’s words as a precise count, of course. By “thousand” he refers to the myriad of misfortunes a person can experience in a lifetime. And by “myriad” I mean “a lot”, rather than its original meaning in classical Greek, “ten thousand”. Large numbers have a way of blurring like that, especially as Shakespeare was writing for an audience who would rarely have any literal use for a thousand. Few people would earn a thousand pounds or travel a thousand miles, although the Globe Theatre might have held three thousand paying customers.

In Timon of Athens, Timon tries to borrow “fifty-five hundred talents” from his friend Lucilius. That’s 120 tonnes of silver, Eastaway tells us. No Elizabethan audience would have grasped what fifty-five hundred talents really meant. Nor, without Eastaway doing our homework for us, do we. (It’s more than $100mn.) But we all get the point: it’s a ludicrous request.

We still share Shakespeare’s love for hyperbolic numbers, but we also need to use big numbers accurately. I’m old enough to remember confusion as to the definition of the word “billion”. These days,

Supreme Court curbs SEC powers to enforce securities laws

People line up to get into the U.S. Supreme Court on the day where decisions ares expected to be handed down, in Washington, U.S., June 26, 2024.  Kevin Lamarque | Reuters

WASHINGTON — The Supreme Court on Thursday put new limits on the power of the Securities and Exchange Commission to enforce securities laws — the latest ruling in a series of cases that take aim at federal agencies.

The court ruled 6-3 that adjudication of cases by in-house judges violates the right to trial by jury.

The case is one of several on the docket involving conservative and business-led attacks on the power of federal agencies. The court’s 6-3 conservative majority is often sympathetic to such arguments.

The challenge zeroed in on how the SEC enforces securities laws, including those prohibiting insider trading. The SEC has long used in-house proceedings presided over by administrative law judges. The agency can also sue in federal court. In both sets of proceedings, it can seek financial penalties.

Those subject to the in-house adjudication have complained, saying the process violates their rights and gives the SEC too much power by essentially creating a home-court advantage.

More from NBC News:

Hedge fund manager George Jarkesy brought the legal challenge after he faced SEC claims that he violated securities laws by making misstatements and omitting relevant information in communications with investors while he was overseeing two hedge funds.

Jarkesy and his firm were ordered to pay a $300,000 penalty, and he was barred from certain roles in the securities industry after being subjected to an in-house proceeding in 2014. The firm was also ordered to return nearly $685,000 in what the SEC considered “illicit gains.”

Jarkesy’s legal crusade had the backing of billionaires Elon Musk and Mark Cuban.

A three-judge panel of the New Orleans-based 5th Circuit U.S. Court of Appeals ruled against the agency, prompting the SEC to ask the Supreme Court to intervene.

CNBC

Market movements and fund performance boost Polar Capital AUM by 14%

In its annual results for the year to 31 March 2024 published today (27 June), the firm reported AUM of £21.9bn, up from £19.2bn a year prior. The increase was largely attributed to a contribution of £4.3bn from market movements and fund performance, which were partly offset by £1.6bn in net redemptions. Core operating profit decreased to £44.8m from £47.9m last year due to lower average AUM for a large part of the year and higher operating costs. Polar Capital shares surge 16% as strong market gains offset £1.6bn outflows Yet this was compensated by a higher performance fee pro…

UBS revamps wealth management division ahead of leadership reshuffle

According to a UBS staff memo seen by Investment Week, the firm will consolidate all its global wealth management units into one department called GWM Solutions. The division will be led by Yves-Alain Sommerhalder, former managing director at Credit Suisse, and will begin operations on 1 July. Sommerhalder will be based in New York and Zurich and will report to Khan and Karofsky while being part of the GWM management team. UBS appoints head of UK wealth management GWM Solutions will include the global investment management, unified global markets, global lending unit and global fam…

Carey Olsen promotes six

Offshore law firm Carey Olsen has promoted Michelle Falcucci, Richard Sykes, Tim Bamford, Rachel De La Haye, Andrew Tually and Nienke Malan, with effect from 1 July. 

The firm said that the promotions bring its total number of partners to 84.   

Falcucci joined Carey Olsen in 2019 from the London office of international law firm Reed Smith. She advises on Bermuda corporate and commercial law, focusing on insurance regulatory and transactional matters. She also has experience in mergers and acquisitions, debt and equity financing and alternative risk financing transactions involving insurers and insurance groups. 

Sykes joined the firm in 2021, having previously led the real estate and development in-house legal team of Dart, the largest real estate and hotel developer in the Cayman Islands. He advises on Cayman real estate, development and all aspects of local leasing and licensing, with a focus on complex real estate transactions and structuring. 

Bamford has been with Carey Olsen since 2002 and advises on corporate and commercial litigation, focusing on complex international commercial disputes, banking and finance disputes, corporate restructuring and insolvency, regulatory actions and intellectual property matters.                   

De La Haye joined the firm full-time in 2013. Her practice focuses on investment funds, particularly in their establishment, regulation and operation, as well as on general corporate and regulatory issues and banking and financing transactions. She also advises on capital markets, particularly in respect of LSE, NASDAQ and NYSE listed clients. 

Tually joined Carey Olsen in 2007 and has experience in the structuring, formation and regulation of Guernsey open and closed-ended collective investment schemes investing in private equity, venture capital, real estate, infrastructure and hedge funds. He also advises on corporate and M&A transactions, including court-sanctioned schemes of arrangement, group restructures and migrations. 

Malan joined Carey Olsen in 2016 and advises on the establishment, structuring, regulation and launch of investment funds, negotiating and drafting commercial agreements and advising on the sale and financing of structures holding international real estate. 

Gibson, Dunn & Crutcher adds New York-based M&A and PE partner

Gibson, Dunn & Crutcher has added Brian Scrivani as a partner and member of its M&A and private equity practice groups, based in New York. 

Scrivani was most recently a partner at international law firm Paul, Weiss, Rifkind, Wharton & Garrison. 

Scrivani advises private equity firms and public and private clients on leveraged buyouts and other private equity transactions, public company acquisitions, sales and divestitures and mergers of equals. He also advises boards of directors and special committees on corporate and securities laws as well as fiduciary and corporate governance matters, including unsolicited offers and proxy contests.