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To: WayneM
The caller was absolutely correct. A stockbroker knows that insider trading is a violation of rule number one. And if she didn't know it was wrong, why did she lie to cover it up?

  Martha Stewart wasn't an insider at ImClone. She did not have inside information at ImClone. This is why she was not charged with insider trading.

  Now, the SEC is going after her in civil court on insider trading - but wait until you hear their theory on the case. Stewart knew that Waksal was selling shares, because her broker told her. That is market information - not insider information. It is legal to trade on market information. However, the SEC contends that, on hearing Waksal was selling, Stewart inferred that the FDA was rejecting the application on Erbitux - which is insider information. So, under this theory, if you guess at insider information, you are guilty of insider trading.

  As to why she lied to cover it up... I certainly have no particular insight, but I'd theorize she figured the feds were out to get her and make her an example. So she wanted to make sure they didn't get anything. The mere fact that she hadn't necessarily done anything illegal is far from a refuge.

  And, of course, it's very hard to be sure she really did lie during those interviews, as we have only sketchy notes and agent recollections to go by. If lying during an investigation is illegal, I wish the investigators were required to record those conversations.

Drew Garrett

17 posted on 03/10/2004 9:09:16 AM PST by agarrett
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To: agarrett
I don't understand the insider trading rule. How is someone supposed to know if information is public knowledge or not? Does it have to be published in the New York Times? If my broker calls me with information, do I have to search every newsletter and every newspaper to find out if the information is public?
24 posted on 03/10/2004 9:29:16 AM PST by Dan Evans
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To: agarrett

If lying during an investigation is illegal, I wish the investigators were required to record those conversations.

I think the lesson that everyone can take from this is that you shouldn't discuss anything with any Federal investigators.

26 posted on 03/10/2004 9:36:46 AM PST by Dan Evans
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To: agarrett
Stewart knew that Waksal was selling shares, because her broker told her.

No. She knew Waskal was selling shares because Waskal's broker told her. That is insider information - not market information

57 posted on 03/10/2004 12:16:23 PM PST by Oztrich Boy (Despise not the jester. Often he is the only one telling the truth)
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