Overview of Insider Trading

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

On the morning of December 27th, 2001, the day before the FDA would make their announcement concerning Erbitux, Sam Waksal and another member of his family called Doug Feneuil to insist that he sell his ImClone shares. He then made the call to Peter Bacanovic, warning him that Sam Waksal was dumping his $7.3 million in ImClone shares. Within minutes of the call, Bacanovic went through desperate measures to reach Martha Stewart. However, Martha was onboard her private plane headed toward Cabo San Lucas, Mexico, so he contacted the next best person, Martha's secretary Ann Armstrong (Slater, 25). With Ann, he left possibly the most infamous 10 words of the entire case: "Peter Bacanovic thinks ImClone is going to start trading downward" (Slater 25). Officials later concluded that Stewart actually changed the wording in her phone log from "Peter Bacanovic thinks ImClone is going to start trading downward," to "Peter Bacanovic re Imclone [sic]", and then

Overview of the Case: The Securities and Exchange Commission claims Mark D. Begelman misused proprietary information regarding the merger of Bluegreen Corporation with BFC Financial Corporation. Mr. Begelman allegedly learned of the acquisition through a network of professional connections known as the World Presidents’ Organization (Maglich). Members of this organization freely share non-public business information with other members in confidence; however, Mr. Begelman allegedly did not abide by the organization’s mandate of secrecy and leveraged private information into a lucrative security transaction. As stated in the summary of the case by the SEC, “Mark D. Begelman, a member of the World Presidents’ Organization (“WPO”), abused

She took an opportunity when she received word that the company, ImClone was about to crash to remove 4,000 shares where she would avoid losing about 46k dollars. Investigation into the case and begun and developments in the case had started surfacing on the truths in the case. On December 27th, Martha Stewart told investigators that she was traveling on a trip when she called to check her messages and her broker had stated that the company had fallen under $60 per share so he sold them. According to the literature, Martha Stewart claims that she had set up a “stop-loss” order, which states if the shares fell below $60/share that they would be sold. Unfortunely, this was not the case when the broker’s assistant came forward and told Merrill Lynch that his boss had told him to lie about the “stop-loss” order. He started cooperating with federal investigators and later was fined and fired from the company along with his boss for the involvement they had in the scandal. On the other hand, after everything started falling apart, Martha Stewart later resigned from her board at the New York Stock Exchange. Later in August, investigators begin building their case against Martha Stewart in her involvement with inside trading and lying about the “stop-loss” order. Investigators reached out to Stewart’s lawyers but later made a statement that Martha Stewart would be pleading the Fifth Amendment and keeping quit about anything to do with the case. As a result, the SEC filed charges against Martha Stewart, and she was found guilty on four counts of obstructing justice and lying to federal investigators. On June 17, 2004, Martha Stewart was sentenced to five months in prison and two years of supervised release along with a healthy fine attached. Till this day, Martha Stewart pleads her innocence and states that she did not do anything wrong. She is currently making a comeback with her company and

However, it is perhaps not entirely right to say that your actions, or what you have been accused of, have nothing to do with MSO. Joan Didion, in her essay “Everywoman.com,” suggests how your reputation is integral to MSO, and she quotes from MSO’s 1999 prospectus: “Our (MSO’s) business would be adversely affected if Martha Stewart’s public image or reputation were to be tarnished” (146). Indeed, a New York Times article by Constance L. Hays, dated 1 May 2003, reports that MSO’s “total revenue fell 14.6 percent in the first quarter” and that “the share price, battered after Ms. Stewart’s name surfaced in connection with the ImClone insider-trading investigation last summer, fell another 11.3 percent.” One could argue that MSO’s poor performance is necessarily due to the difficult state of the economy at present, but according to MSO’s accounts, your company was in fact posting growing revenue figures until you were implicated in the Imclone scandal. So as you can see, your public image is closely intertwined with the survival and prosperity of MSO. Your actions do indeed affect your stakeholders.

She was found guilty of insider trading in 2003 and was convicted and sent to jail. She sold her shares of biopharmaceutical company ImClone Systems from a top that she got from Peter Bacanovic, a stock broker that worked at Merrill Lynch. He got the tip from chief officer Samuel Waksal, after he sold all of his shares in the company. This company was one that was working an a cancer treatment and was waiting for the FDA to get back to them to see if they would approve of their drug. Which they did not, causing the stock to drop 16% in one day. Since stewart sold her shares early, she was able to save around $45,673 bucks because of the information that wasn’t made public! She ended up doing a five month sentence with probation and house arrest. While Waksal, the CEO of the company, did seven

The argument that I am making should be addressed to Baconivic and the people that agree with his business ethics. Instead of having a Carr mindset, I have more of a Drucker mindset. With my Drucker mindset, I would address Baconivic and these people about how spreading insider information to only a select few is against the law and how it could ruin their image as people in the working field. No matter whether you are a senior broker or assistant, ruining your image in the working field does no good to anyone. All their hard work up to that point will diminish and trying to gain back a good reputation will be difficult. As many parents tell their children, Baconivic and his supporters should put themselves in the shoes of other shareholders that will fairly lose money from their investments in the ImClone company. By doing so, they will be able to mentally see and feel the loss that happens through stocks. Instead of trying to give certain people unfair advantages, higher authoritative positions in companies should be more ethical and try to give reassurance that the stocks will raise

The indictment separately charged Stewart with securities fraud in connection with her artificial manipulation of the price of MSLO common stock” (Justice Government Press Release, 2003). The charges contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty (Custom edition for Indiana Wesleyan University. 2007. p. 230).

SEC whistleblowers who provide tips about possible unlawful conduct are heroes, although they rarely see themselves that way. Anyone who is considering alerting the U.S. Securities and Exchange Commission (SEC) about irregularities that involve their employer, colleagues or friends has probably wrestled with the decision for a while before taking action. People who find the courage to report potential violations should remember that they are protecting investors who are saving for retirement or their child's college education.

Bud Fox was caught by the Securities and Exchange Commission (SEC) of committing insider trading. He knew about the FAA information that was about to be released to the public from his father and acted on that information by relaying to Gekko. He would also go to local attorney offices and steal information about companies and use that information to his advantage with Gekko. He made a lot more money this way, but in the end, he lost by getting caught similar to how Martha Stewart was caught insider trading (“Smith, G” 2002, August). Usually when something like this happens, the SEC negotiates a deal with the accused by having them wear a wire and possibly find other individuals guilty. Fox did wear a wire and approach Gekko, who brought

Insider dealing has been affecting the efficiency of stock markets in different places like United States, United Kingdom and Australia. Hong Kong is of no exception. Basically, insider dealing refers to the trading of a corporation’s stock or other securities by individual with potential access to non-public information of the company. The law of insider dealing in Hong Kong provides a much more detailed definition and is very comprehensive. However, when it comes to enforcement, it seems not very effective. In the following, the law of insider dealing in Hong Kong will be summarized. After analyzing the comprehensiveness of the law, the underlying reasons of the difficulty in enforcement will be identified. Some

It can fairly be said that an Investor considering an investment decision (whether to purchase, sell or hold stock) in publicly traded company acts on the basis of extensive information which is available by corporation to him until the last moment of his investing decision and try to determine the fair price of corporate stock. In the light of continuous creation of a particular impression of corporate affairs by the corporation, new information by corporate can vanish the importance of previous available information to investor. In the scenario only one kind of investors can get advantage over others, who is either very close to corporate operation (corporate officers) or can access nonpublic price-sensitive information to corporation

The Stock Market is an organized market for the trading of stocks and bonds. In Europe a stock exchange is often called a bourse. Stock exchanges exist in all-important financial centers of the world. Members of an exchange buy and sell for themselves or for others, charging commissions. A stock may be traded only if it is listed on an exchange after having met certain requirements. The New York Stock Exchange (founded 1790) is the largest in the U.S., handling more than 70% (in market value) of all transactions. The American Stock Exchange (Amex), also in New York City, and regional exchanges account for the remainder. Unlisted shares, often of smaller companies, are traded in the growing over-the-counter

The illegal construction of the Bernie Madoff securities pyramid scheme grew to preposterous proportions from legal, auditing, and regulatory weaknesses of the Securities Exchange Commission, the designated regulatory body of the U.S. financial markets. The required expertise, authority, and relevant penalties needed to deter management from committing ethical breaches lacked substance in the case study of BMIS (Crews 11). Even after the wake of the Enron and WorldCom scandals that occurred in the early 2000s, the SEC unexplainably revoked provisions created to help avoid fraud. The provision the SEC revoked specifically mandated firms structured like Madoff’s to be audited by accounting firms registered and audited by the Board. By revoking the provision, BMIS was allowed to continue its Ponzi scheme for another half a decade with the aid of utilizing an unregistered, small accounting firm called Freihling & Horowitz (“Madoff’s Jenga”

Insider trading refers to the trading of a listed company’s stock or other financial securities by individuals who has access to non-public material information about the company. This action often occurs within employees/ex-employees of the listen company. Information is considered to be non-public material information if making it public would affect the price of securities, and using such information in decisions to buy or sell financial securities would be unfair to non-insiders (Bainbridge, 2013). Insider trading is treated as a mischief in more than 90 countries, and defendants are imposed with penalties (Beny, 2012). Specific insider conduct regulations in New Zealand were first enacted in 1988, followed by amendments in 2002, 2006 and 2008. The insider conduct regimes between 1988 and 2008 are often considered as a failure due to weak enforcements. Thus in 2008, the regulator introduced a new regime, which was a close model to the Australian insider conduct legislation. Both regimes are expansive, meaning it could be applied to any person in possession of insider information. However, while the Australian laws were aggressively enforced (more than 26 prosecutions were brought since then), no prosecutions have been launched under the new legislation in New Zealand. In addition, New Zealand also had no convictions secured prior to 2008, illustrating a clear enforcement deficit in the New Zealand