Anheuser-Busch and Campbell Taggart Case Essay

1008 Words Oct 21st, 2010 5 Pages
When assessing the economic damage to due to Paul Thayer and those that he tipped off about the acquisition of Campbell Taggart, it should be noted that some argue that this kind of insider trading circulates information and forces the stock to its “true value.” If we assume this argument to be flawed, then part of Anheuser-Busch stock dip after the announcement was due to the insider trading and the fact Anheuser-Busch probably paid more to acquire its target. Thayer and his friends trade the Campbell stock for nearly a month before any public announcement of the merger. On July 27 nearly half the volume was insider volume controlled by those individuals who were in violation of rule 14(e)-3 (See exhibit 2). The increased volume might …show more content…
The insiders bought nearly 113,200 shares of the company, causing this rise in stock price. Anheuser-Busch should sue Paul Thayer along with the rest of the insiders for repayment of any profits made on insider trading in Campbell Taggart, treble damages, as a multiple of the profit made, and for punitive and exemplary damages from Mr. Thayer and the rest of the insider traders. This is the reaction and the course of action that should be taken after Anheuser found out about the suit filed by the Securities and Exchange Commission.
In looking at the suit filed by Anheuser, we can closer examine how Anheuser- Busch was damaged through the actions taken by Mr. Thayer. Anytime that an insider trading scandal takes place, there is always damages and repercussions. The most identifiable damage is that of money and capital. Anheuser-Busch paid nearly $40 million more for the acquisition of Campbell Taggart due to the active trading of Mr. Thayer, and the rest of the insiders. It is easily identifiable, that one damage to Anheuser-Busch was a $40 million dollar excess payment to acquire Campbell Taggart. By exploring and understanding capital markets, we find other monetary damages to Anheuser-Busch. These damages come from the cost of ongoing lawsuits with the SEC as well as with the defendants, Paul Thayer, and the other insiders. Another monetary damage from the effects of the insider trading is the allocation of management resources during the legal battles and

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