How realistic is Billions? Meet real-life inside traders

With the start of the much-anticipated fourth season of Billions, we take a look at some highly publicised cases involving insider trading.

Set in the Big Apple, Billions is all about what wealth, influence – and corruption – can get you. US attorney Chuck Rhoades has never lost an insider trading case, that was until he crossed paths with Bobby “Axe” Axelrod. Wendy, Chuck’s wife who used to work for Bobby, is now counsellor to both men and new rivals stir the pot. Brace yourself for a sordid state of affairs that, four seasons later, sees Chuck and Bobby working together to defeat a common enemy.

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What is insider trading?

This is the trading of a company’s stock by individuals with access to non-public information about the company. It’s unfair to other investors who aren’t privy to that info because the investor with the inside track stands to make larger profits than a typical investor.

Martha Stewart

The homemaking mogul incurred the wrath of the law when she sold all her shares of biotech company ImClone in 2001. A mere 48 hours later, ImClone stock fell a whopping 16% after it was announced that the FDA hadn’t approved one of their pharmaceutical products.

By selling her shares, Stewart avoided a US$45,673 loss, the equivalent of R660,000. Her broker, who also worked with the CEO of ImClone, alerted Stewart that the CEO was planning on selling his large stake in the company. In court, it was proved that Stewart acted on a tip that was not in the public domain. She was also caught out perjuring herself.

Stewart was sentenced to five months for obstruction of justice and forced to step down for five years as CEO of her company.

Jeff Skilling

At the heights of its success, Enron Corporation was under the fearless leadership of a shrewd and sharp businessman: Jeff Skilling. Founded in 1985, Enron was an energy company which focused on electricity, natural gas, communications, pulp and paper. For six consecutive years, Fortune named it America’s Most Innovative Company. It all came tumbling down in 2001 when it was revealed that Enron’s financial condition was maintained by creatively planned accounting fraud and corruption.

Dubbed the Enron scandal, the debacle had a snowball effect on the business world by causing the dissolution of the Andersen Accounting Firm which was Enron’s main auditor. The bankruptcy was by far the largest in US history and 20,000 employees lost their jobs and their life savings, while investors lost billions.

Meanwhile, Skilling and some of his executive board members had sold their stock before they declared bankruptcy, making a substantial profit. He was sentenced to 24 years in prison.

Foster Winans

The line between unethical and criminal may be a bit blurry, but Foster Winans was found to have crossed both when he was convicted of insider trading and mail fraud while working for The Wall Street Journal.

As a columnist for the publication from 1982 to 1984, he would leak contents of his columns to a stock brokerage firm and earned US$31 000 which is close to half a million Rand.

Will Axe end up in a prison cell like these inside traders? Watch Season 4 of Billions to find out!

Billions S4 is on Wednesdays on M-Net (101) at 21:00, episodes come express to Showmax at the same time.
Also available on Catch Up and DStv Now »

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