Is All Insider Trading Illegal?

Is All Insider Trading Illegal?

– Most penny stocks exist
to enrich the insiders and the management, that’s
why you become a penny stock. (upbeat music) So insider sells are a little different, where insiders selling,
it’s like wait a minute, what does this guy know that
other people don’t know, like if the president
sells half his shares, the president probably knows
what’s going on in the company, why is he not investing any more? No different than insider buys, where if an insider adds to their position and doubles their position,
it’s not even about the money, it’s just that whoa, wait
a minute, they might know somethings coming up,
they have confidence, lets see why they’re adding to this. So insiders are a little different. But you also have to think of like financing’s kind of as insider sales, because financing’s
raise the companies money but how does the company spend the money to pay the insiders? So a lot of these pump and
dumps, they get their stock up, sometimes the insiders don’t even sell, so there’s two different
ways that insiders can cash in on a pump and dump. They can sell their shares into the pump, and you know, they have to file forms and then it kind of looks
like a pump and dump, or they could just say
hey, lets pump the stock up from 20 cents to 90 cents
and lets do a financing. And that way, we’re not
going to sell our shares, we’re just going to raise 30 million and then you know,
basically rape the company over the next few years
spending that 30 million on their salaries. So they still get paid,
whether they sell the shares right away or they take excessive salaries paid for by shareholders. Most penny stocks exist
to enrich the insiders and the management, that’s
why you become a penny stock. Not because there’s glory, like hey, my stock is trading at 30 cents. No, they’re not proud of it,
but it’s a liquidity vehicle for them to raise money
and get people interested in funding their extravagant
cocaine fueled lifestyles. Most of the time, not all the time. – [Man] Damn it, I had a
question, but I forgot it. – But that’s what you have to think, like, you know, if a CEO is making some positive statement, does
he really believe it, or is he just trying to get the stock up? Most of the time, CEOs
and management teams exist as shareholders and cheerleaders. It’s in their own best interest. So these companies could be on the verge of bankruptcy and they won’t say it. Barestone CEO or CFO was on CMBC the day before they went out of business they asked him, they’re
like how’s everything, he’s like, we’re fine, we’re good. The next day, bankruptcy. He couldn’t admit it, he couldn’t say we’re going bankrupt on TV. – [Man] So whenever the, say
like when an insider sells, or say an insider buys,
adds to their position, it, they’re required to- – File. – [Man] To file that, right? – Yes. – [Man] In the FCC
filings, or they usually put out a press release
whenever an insider- – Although with a lot
of these penny stocks and a lot of these pump and dumps, their filings aren’t exactly accurate. Some of these pumps they say like, we’ve reduced the share count we’ve reduced the authorized shares, and then really they’re
just transferring shares to the Cayman islands to
make them untrackable. – [Man] So what does
that mean when they say they’ve reduced their share count? That’s a good thing? – Well, it’s supposed to be,
because then theoretically if there’s less shares
there’s less supply, and more demand should increase
the price of each share. – [Man] Exactly. – But there’s just no way to tell. – [Man] So then they,
you said that they just the reduce the shares by doing what? – They just take the
shares, the certificates out of circulation, they say that word just getting rid of them, but you never really get rid of them, they just usually transfer them somewhere. So Spongetech, one of the
biggest pump and dumps in history came out with press
release after press release saying we’re reducing our shares, we’re reducing our debt,
meanwhile the promotions kept going out, the emails, so what it found out, because
they were eventually sued for fraud and wire fraud
and all kinds of bad stuff, they didn’t get rid of the
shares, they just hid them, and then they were selling them secretly. So they put out a press
release saying look, we’re getting rid of these shares, don’t worry, there’s not
that many shares out there, but then they went to some shady broker and they’re like yeah, sell those shares. That’s the game! So you can’t believe any
companies press release, you can’t even believe
their freaking SCC filings. If you expect the worst out of everyone you will not be disappointed. And you might even be surprised, because there might be,
you know, one or two good companies that do something good for at least a little bit until their incompetence and drug addiction take over and fails the company in time. But yeah, that’s the thing. And you also have to think, just to think, just to confuse you even more, insider buys might be a
good thing for the company because you’re like oh, the CEO is buying, like that’s good, but how
much is he really buying? Or she? Right, like are they really
adding to their position, are they doubling their position? Because they believe in the company, or because they know it’s
going to create news, that’s going to create a spike, and the spike is going
to create a financing? So they double their
position in the investment lets say, maybe they have
$250 thousand worth of stock, and now they have $500
thousand worth of stock. So they bump it up $250 thousand. But maybe they don’t
believe in the company, they just doubled their position because they know it’s
going to be a press release and it’s going to spike
the stock from maybe 30 cents to 60 cents,
then they’re going to do a $5 million financing,
so even if they think the companies going to
go bankrupt in two years it pays for them to
double their investment, lose the $250 thousand in five years, but by being able to get the stock up and doing the financing, they can raise $5-$10 million, and then
pay themselves a million over five years. So they lose $250 thousand
on their increased position, but they make it back in salary. Hey, Tim Sykes millionaire
mentor in trader, thank you for watching my videos, I hope that they help you, I want to share everything
that I’ve learnt over the years you can check out more videos right over there, and also click subscribe so you can watch all of these videos, get that knowledge and become
my next millionaire student.


  1. dechen rabgyal says:

    Damn didn't see that coming!!!

  2. Артем Заянчковский says:

    Thank you so much!🙂👍👍👍👍

  3. BullyMangler says:

    insight overload

  4. MoTC says:

    I just want to clarify something that's never totally made sense to me:

    If insiders are buying or selling we take that as good or bad because they must know something…
    But insider trading based on information not available to the public – is illegal.
    So if they're not breaking the law, then surely we can only assume they 'believe' (or not) in the company, rather than have any special solid info…

    Is that about right?

  5. Timothy Sykes says:

    What do you think about this video content? Leave a comment and tell me…

  6. Nice Trade says:

    Pretty much every big money Investor uses Insider Trading in some way or another.. Even Warren Buffett over the years, from time to time must have had a few little birds telling him stuff..

  7. doody fly says:

    I Watched this video couple of times to get full points. Thanks.

  8. David Y says:

    very good info, thanks!!

  9. Emotional Trader YT says:

    I wish I had Insider Information 😭

  10. Ramon G says:

    I don't know if all insider trading is illegal or not, but I like to be educated on how trading works and listen to companies' press releases to make better education move in trading.

  11. Love Liberty says:

    Great point, thank you!

  12. Pat Rick says:

    This is some wizardry knowledge from the experienced!

  13. jonharson says:

    It's not illegal, *if* you are called Biden or Clinton.

  14. Omar Elias says:

    Do these manager's get a bad reputations, whereby they tarnish their name and reputation for future employment? Or do they simply vanish and fade away?!

  15. Belle P. says:

    The original penny stock OG mentor. Tim you’re still the best imo.. just letting you know.

  16. VOGAS for VeinOfGoldAndSilver says:

    Thanks T.T. this coming week I will start reading your book for 3th. time

  17. jerrr says:

    I would love to meet you one day

  18. Ben Spirak says:

    Good video!

  19. Luke Caetano says:

    If I became a challenge student would I be able to talk to you personally and ask u questions

  20. Irish Fighter says:

    Hello timothy, thanks for your videos that great! Do you think its better to wait few minutes at the opening market when you use dip buy pattern or do you try to setup your buy at a predetermined level?

  21. LsR209 Master Warranty Technician says:

    Great video. It’s mind blowing to learn about insider trading. Thanks Tim.

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