The Dark Web and bitcoin are the tools of the trade for online criminals these days. Apostolos Trovias is alleged to be one of those criminals. He operated online under the pseudonymous online avatar “TheBull”. Mr. Trovias is alleged to have engaged in a deceptive scheme to offer and sell what he called “insider trading tips” on the Dark Web, offering purchasers an unfair advantage when trading securities.
Mr. Trovias claimed that he had order-book data from a securities trading firm that was provided to him by an employee of the trading firm. This would seem to be material, nonpublic information that was supposed to be kept confidential.
If Mr. Trovias had actually acquired some or all of the tips from actual order-book data or if he had stolen the order-book data himself, then he had engaged in a fraudulent scheme to sell material, nonpublic information that he knew or was reckless in not knowing was obtained in violation of a duty of trust and confidence. That’s illegal.
If Mr. Trovias did not actually have this information, then his statements were materially false and misleading and made in furtherance of a scheme to deceive purchasers who wanted to trade on inside information. That’s also illegal.
What fascinated me about this case is that the Securities and Exchange Commission doesn’t have to prove that Mr. Trovias was actually selling or using insider information. The SEC wins either way.
Sources:
I’m sorry, but I’m not following your conclusion. The SEC is a regulatory agency of the federal government, much like the ATF. They serve as investigators, police, and even prosecutors. But the courts rule on guilt or non-guilt.
If the SEC brings a case against Mr. Trovias alleging insider trading, don’t they have to prove beyond a reasonable doubt that he obtained material, non-public information AND that the information was used (by himself or others) for the furtherance of financial gain? If they can not prove that the information is real, he cannot be convicted on that charge.
But if they charge him with fraud, they have to prove his claims (of the information being sold being material, non-public information) as materially false. Sure, they could attempt to prove some of his other claims as materially false, but this is the one focused on in the article. Realistically, a defense against fraud is typically proving that the information provided was true. But doing so would invariably violate his 5th amendment to not self-incriminate on the other potential charge.
And charging him with both crimes would be contradictory. It would be alleging that the material WAS material, nonpublic information AND that it was not material, nonpublic information. Sure, the SEC could files these charges, but most courts and jurors would not look kindly upon a prosecution that doesn’t know what happened and is fishing for the judge and jury to decide what happened.
So, to my understanding, the SEC needs to gain evidence as to what actually happened and choose how they wish to proceed. If they just try to throw both charges at Mr. Trovias, it’s more likely that he’ll walk. Am I missing something?