Posted on 01/31/2002 4:04:38 PM PST by Bayou City
Global Crossing Ltd.
CASE INFORMATION
Summary: According to a Press Release dated July 27, 2001 the complaint alleges violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The complaint further alleges that the Prospectus was materially false and misleading because it failed to disclose, among other things, that: (i) the Underwriter Defendants had solicited and received excessive and undisclosed commissions from certain investors in exchange for which the Underwriter Defendants allocated to those investors material portions of the restricted number of Global Crossing shares issued in connection with the Global Crossing IPO; and (ii) the Underwriter Defendants had entered into agreements with customers whereby the Underwriter Defendants agreed to allocate Global Crossing shares to those customers in the Global Crossing IPO in exchange for which the customers agreed to purchase additional Global Crossing shares in the aftermarket at pre-determined prices.
The only exception is when the founding shareholders sell part of their personal stake during the IPO. McCauliffe apparently did not do this, or he would not have made $18 million.
Gary Winnick has served as a director of GlobalCenter Inc. since February 1, 2000. Mr. Winnick is the founder of Global Crossing Ltd. and serves as Chairman of the Board of Global Crossing Ltd. Mr. Winnick is the founder and since 1985 has been the Chairman and Chief Executive Officer of Pacific Capital Group, Inc., which is a leading merchant bank specializing in telecommunications, media and technology and which has a substantial equity investment in Global Crossing Ltd.
(1) Selling calls allows your stock to be called away at the strike price and will wipe out any opportunity for profits above the strike price.
(2) Options are not traded on IPOs until a good long time after the stock begins trading. No options, no options trading.
(3)Selling below the top does not mean he lost the shares though an option call. It simply means that he sold before (or after) the stock peaked.
(4) He had no reason to go gambling with call options. Someone in his position (if he used options at all, after they began trading)would only buy protective puts to make sure he did not lose it all in a crash.
(5) Don't try this at home.
I agree with what your assessment of his actual status was, I should've made myself clearer (nobodyUknow's post 72 was better than mine). That said, as far as I know, nobody's found the SEC disclosure of his transaction. Second, as I said earlier, I think ultimately the real scandal lies w/ Arthur Andersen, & I think they're toast.
best, college_kid.
As far as private placement shares. Couldn't they have decided to sell Terry shares at whatever price they wanted to? As long as the board agreed? No matter what, I'd be curious to see where his sells (or any buys) were and how they line up to news releases and upgrades/downgrades.
Glad you are here. Experts help.
LOL! Great post.
While we're at it, lets look at that Naval Reserve Oil Deal that Gore and Clinton cooked up.
See my post #13. There is a link to a Drudge article where McCauliffe says he made millions on Global Crossing and then made millions more after the stock went public.
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