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SEC Settles Insider Trading Suit With Son of California Bank Board Member

The Securities and Exchange Commission continues to crack down on illicit activity within the cryptocurrency industry. It is easier said than done, as a lot of dubious-looking projects exist today. Aaron Smith of San Francisco was recently charged with insider trading. That wouldn’t be entirely unusual, were it not for the fact that Smith is the son of a California bank board member.

Aaron R. Smith Is in the Hot Seat

According to new information shared by the SEC, they had charged a California bank board member’s son with insider trading. Aaron R. Smith, son of a director at Valley Commerce Bancorp, had used material nonpublic information to conduct stock trades. This information pertained to a north Californian bank being acquired by another local bank in a non-public manner.

Smith learned about the impending deal from his father. With this knowledge, Smith Jr. decided to use a large portion of his personal savings to open a brokerage account. With that account, he began trading Valley Commerce Bancorp stock. Once the acquisition was made public, the Bancorp stock price soared by 37%.

For Smith, this netted him close to $41,000 in profit. He still has not admitted or denied these charges, yet Smith agreed to settle with the SEC and put this matter to bed once and for all. He will cease and desist from further violations of federal antifraud provisions and pay a fee of $43,783.35. An additional penalty of $40,578.28 will be paid as well.

It is not the first time insider trading has affected the financial industry. It is a very common activity, mainly because informed sources tend to share information, either willingly or by accident. It is not unique to traditional finance either, as the cryptocurrency industry has witnessed insider trading incidents as well. This mainly pertains to exchanges listing new coins and some speculators reaping the early rewards.

It is important for family members to never divulge such information. A slip of the tongue can occur at any time, but it can have massive consequences for the industry as a whole. Smith will avoid jail time as a result of settling. It is unclear why he decided not to admit to these charges, since the evidence clearly outlines what happened behind the scenes in this case.

For the SEC, it is another small victory toward creating a safer and more robust financial ecosystem. All of these developments are designed to make both consumers and corporations feel safe and secure. Rest assured this will not be the final incident involving insider trading, either within or without the cryptocurrency industry.

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Is Demand For Bitcoin Mining in Decline? Chip Maker Slashes Target

Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest dedicated independent chipmaker, has predicted a drop in demand from the cryptocurrency mining community in the fourth quarter this year. The growth target of 7 to 9 percent was slashed to 6.5 percent partly due to the demand dynamics of bitcoin miners. Crypto Mining Demand For TSMC Chips to Weaken Further In Q4 2018, Says CEO C. C. Wei, Chief Executive Officer and Vice Chairman of TSMC told investors at the company’s third quarter 2018 earnings conference that business growth would be offset by “continued weakness in cryptocurrency mining demand”. “Moving into fourth quarter, despite the current market uncertainties, our business will benefit from the continuous steep ramp of7-nanometer for several high-end smartphones as well as the demand for 16/12-nanometer for the launches of new-generation GPU andAI. However, this growth will be partially offset by continued weakness in cryptocurrency mining demand and inventory management byour customers.” The company forecasts growth between 5 and 7 percent for the overall semiconductor market excluding memory, while foundry is expected to grow between 6% and 7%. Weakening demand from cryptocurrency miners has forced the firm to adjust the growth estimate to 6.5 percent in U.S. dollar terms, according to the chief executive. “However, our business is also negatively impacted by further weakening of cryptocurrency mining demand. As a result, we estimate our 2018 growth rate will be about 6.5% in U.S. dollar term, which is close to the foundry industry’s growth but slightly below our 7% to 9% guidance given in the last conference.” The downshift in mining profits is the main responsible for the company’s revision of its full-year sales target, citing uncertainty in the cryptocurrency market as its reason. In April, the Taiwan Semiconductor Manufacturing Company lowered its 2018 revenue guidance to 10% growth from 10-15%, estimating that about 10% of the Asian chipmaker’s revenue depends on cryptocurrency mining demand. Moreover, the entrance of Samsung in the global cryptocurrency mining sector could be providing TSMC their first real competitor in the sector, which in turn, may eventually push the company to lower its sales targets in years to come. Samsung has started the production phase of bitcoin and cryptocurrency mining equipment and ASIC mining chips earlier this year. The company intended to manufacture GPU miners for miners targeting small cryptocurrencies in the upcoming months. President Trump’s trade tariffs, on the other hand, may hurt future trade volumes of Chinese companies producing cryptocurrency mining hardware. This may eventually benefit TSMC as competitors from the People’s Republic of China will have a hard time in the race for the U.S. market. The post Is Demand For Bitcoin Mining in Decline? Chip Maker Slashes Target appeared first on NewsBTC.

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