These results are indicative of SEC employees being either: (i) skilled investors, (ii) lucky investors, or (iii) privately informed. We cannot confirm that our results are driven by trades on non-public information. While we do observe some unusual trading patterns around certain SEC activity (e.g., trading prior to enforcement actions and after whistleblower tips), several other innocent and viable explanations exist for our results. For example, SEC employees are likely very familiar with securities markets, accounting, and financial analysis, and they may just be good stock pickers.
‘Enforcement 40’ for 2020
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