Turney Duff’s Insider Trading 101

Former hedge fund guy turned tell-all memoirist Turney Duff has a post up today detailing the casual atmosphere in which insider trading was once able to flourish. His years in the game mostly pre-date the recent insider trading crackdown, but for what it’s worth, here’s his Insider Trading 101 rules:

One of the many things I learned at the Galleon Group was how to not get caught. If you want to play it fast and loose there are certain rules you must abide by.

• Never trade options on a sure thing; it’s the first place they look.
• Always have a paper trail, an email pitching you the idea for every reason except the inside information.
• Buy more than you want and then sell some before the announcement. It shows misperception. If you knew about the announcement then why would you sell some right before?
• Never have anything in print. Only use the phones (this one is changing)
• Find the derivative stocks that will benefit from the news, play those big.
• Be prepared for a phone call with the S.E.C. Play dumb, but have your story straight.
• Discuss the trading idea with other employees, but withhold the secret sauce.
• Reward your informant handsomely.

Duff has been incredibly candid about his checkered career and all the bad decisions he’d made back in the day. It’s nice to see the big reaction his book has gotten, see:

The Buy Side: A Wall Street Trader’s Tale of Spectacular Excess

The rest of the post is below:

Insider Trading 101 (TurneyDuff)