To: syriacus
If a company has publicly traded stock, then the people on the inside are not allowed to trade their stock using the knowledge they have because they are inside.
For example, if an insider knows that something is about to happen that will make the company more profitable, he is not allowed to go and buy up stock before the public announcement of the event, while the price is still low.
Conversely, if an insider knows that something bad is about to happen, he is not allowed to dump his stock before the public finds out about the problem and the price goes down.
That is what Martha Stewart got arrested for. I don't remember the precise details, but her friend Sam Waksal got word that the FDA was not going to approve some drug or process or something that Waksal's company owned, and which was supposed to be very profitable. He and his family dumped all their stock before the public could find out about the problem, and he supposedly gave Martha Stewart a heads up, and she sold hers. She avoided about $100,000 in losses by selling when she did, I think, but ended up jeopardizing a billion dollar company.
As to the company you're talking about, you'd first have to know if it is a publicly held company. Then you would have to know if the insiders did any stock trading before the event you're talking about.
To: lady lawyer
Thank you for taking the time to explain that to me.
657 posted on
11/03/2003 4:58:27 PM PST by
syriacus
(Casual comments about tubes, made after watching a 3 handkerchief movie, do not justify euthanasia.)
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