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Insider Trading - news report
>Return-Path: [email protected]
>Date: Thu, 19 Sep 1996 15:46 EDT
>From: "E. Allen Smith" <[email protected]>
>Subject: Insider Trading - news report
>To: [email protected]
>X-Envelope-to: [email protected]
>X-VMS-To: IN%"[email protected]"
>Sender: [email protected]
>
> I'd be curious as to the comments of Black Unicorn and others on
>that legal finding - it does appear to make things at least a bit better
>in this area... including making it difficult to claim that insider
>information shouldn't be transmitted on the Net. Incidentally, I find
>AP's calling insider trading "fraud" rather biased.
> -Allen
>
>> _________________________________________________________________
>> Direct Media
>> _________________________________________________________________
>> INSIDER TRADING NEVER WENT AWAY
>> __________________________________________________________________________
>> Copyright © 1996 Nando.net
>> Copyright © 1996 The Associated Press
>
>> WASHINGTON (Sep 18, 1996 10:35 a.m. EDT) -- One of the most infamous
>> acts in the financial fraudster's playbook, insider trading, remains
>> at record levels, despite a decade of steady crackdowns by regulators.
>
>[...]
>
>> The SEC brought one of its more unusual insider trading cases on
>> Monday, when it sued the unnamed account holders in a Swiss and
>> Bahamian accounts with insider trading ahead of The Gillette Co.'s
>> merger proposal for Duracell International.
>
>[...]
>
>> One disturbing development for regulators is a recent decision by the
>> 8th U.S. Circuit Court of Appeals that struck down one of the SEC's
>> main enforcement tools in insider trading cases.
>
>> The court, which covers several Midwestern states, rejected the
>> so-called "misappropriation theory" in insider trading cases, which is
>> used to nab people trading on inside information who don't owe a
>> fiduciary duty to the company's shareholders. The court also rejected
>> an SEC rule used to snare insider trading in tender offers.
>
>> The 8th Circuit decision came in August in a Justice Department case
>> against Minneapolis attorney James H. O'Hagan, who was charged with
>> insider trading during the 1988 takeover bid of Pillsbury Co. by Grand
>> Metropolitan PLC. SEC General Counsel Richard Walker has asked the
>> appeals court for a rehearing on the matter.
>
>> While the 8th Circuit decision represents a setback for the SEC, the
>> agency usually brings its cases in the New York and Chicago areas,
>> where the federal courts acknowledge these insider trading rules.
>
>> Regulators say these enforcement tools are important because insider
>> trading follows few patterns. In an analysis of 35 cases brought in
>> 1995 that solely dealt with insider trading, Gerlach said 20 involved
>> trading ahead of mergers, three ahead of other positive corporate
>> announcements and six ahead of bad corporate news.
>
>> He described 16 of the cases as "classic insider trading" involving an
>> executive, company director or employee who traded on confidential,
>> market sensitive information or tipped friends about it. Among the
>> remaining cases, four involved trading by securities brokers or other
>> industry officials, four involved law firm employees and one, an
>> employee at an outside accounting firm.
>
>> Investigators at the Nasdaq Stock Market's market surveillance unit
>> refer a significant number of insider trading cases to the SEC. Halley
>> Milligan, who heads a team of nine insider trading investigators at
>> Nasdaq, said the market has made 73 referrals on suspected insider
>> trading to the SEC so far in 1996, which is on par with last year,
>> when 107 cases were referred to the agency.
>
>> Nasdaq, like major stock markets, uses sophisticated computer
>> technology to sniff out illegal trading. The Nasdaq system is called
>> SWAT, or Stock Watch Automatic Tracking, which scans news databases
>> after detecting any unusual trading.
>
>[...]
>
>> Copyright © 1996 Nando.net
>
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