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Insider Trading - news report

	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.

>     _________________________________________________________________
>   Direct Media
>     _________________________________________________________________
>                        INSIDER TRADING NEVER WENT AWAY
>   __________________________________________________________________________
>      Copyright &copy 1996 Nando.net
>      Copyright &copy 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 &copy 1996 Nando.net