A Former Financial Analyst Allegedly Used Xbox Audio Chat for Insider Trading
The U.S. Securities and Exchange Commission (SEC) has accused a former financial analyst of conducting insider trading using Xbox audio chat. The SEC has charged four individuals with insider trading based on confidential information about business mergers and acquisitions. Criminal securities fraud charges have also been filed against three of the men. According to the SEC complaint, the analyst, Anthony Viggiano, shared insider information with his friends Stephen Forlano, Christopher Salamone, and Nathan Bleckley. Viggiano allegedly provided funds to Forlano for trading to avoid suspicion of insider trading. The SEC revealed that Forlano conveyed insider trading knowledge to Bleckley through an Xbox audio call, resulting in substantial profits.
Trading Profits through Xbox Audio Chat
In one instance, Forlano informed Bleckley over an Xbox audio call that American ecommerce company ChannelAdvisor (ECOM) would soon be acquired. Based on this tip, Bleckley purchased ECOM stock, which surged by over 55% following the public announcement of the acquisition. Bleckley sold the shares and option contracts, earning $23,003 in profits. The complaint also outlined other alleged incidents of insider trading involving Salamone, Forlano, Bleckley, and other individuals who collectively made illicit profits of approximately $110,000.
Privacy Concerns with Xbox Audio Chat
It remains unclear how the SEC obtained knowledge of the Xbox audio calls during its investigation. However, it is worth noting that Xbox consoles have features that can record and report in-game audio when instances of inappropriate behavior occur. While Xbox employees do not listen to audio calls or store conversations, there are concerns about whether call data is shared with investigating authorities. Decrypt has reached out to Xbox for comment on this matter.
Hot Take: Insider Trading Through Unconventional Channels
The case involving the use of Xbox audio chat for insider trading highlights the potential risks associated with unconventional communication methods. This incident raises questions about the privacy and security measures in place when using gaming consoles for communication. It serves as a reminder that individuals engaged in illegal activities may exploit various platforms, even ones not typically associated with financial transactions. Regulators and authorities need to stay vigilant and adapt their strategies to address these emerging challenges in the digital age.
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