ImClone founder Sam Waksal walked out of prison last month and took up residence in a halfway house in the Bronx.
Waksal was locked up for insider trading, on a sentence of seven years and three months.
Here's an argument to the conclusion that he should never have been prosecuted from Reason.
Martha Stewart was allegedly one of the individuals whom Waksal tipped off about inside market-moving information. She went to prison herself of court, but on much lighter terms than his.
Showing posts with label Martha Stewart. Show all posts
Showing posts with label Martha Stewart. Show all posts
Wednesday, September 10, 2008
Monday, January 21, 2008
Insider Trading and mergers
About a year and a half ago, Gretchen Morgenson of the NY Times wrote a story with the lead, "The boom in U.S. corporate mergers is creating concern that illicit trading before deal announcements is becoming a systemic problem."
It wasn't merely US mergers she was concerned about, though, despite the wording of that lead. She cited a study by the UK's answer to the SEC, their Financial Services Authority: that showed that in 2004, 29% of companies involved in mergers experienced abnormal trading before public announcements. The FSA also said that in 2001, the comparable figure had been 21%.
What accounts for the increase? Perhaps it simply became more difficult to keep a secret between 2001 and 2004.
Ms Morgenson also quoted a money manager named Herbert Denton: "Martha Stewart got hurt very badly for something that happens every single day on Wall Street. It's a falseness and a hollowness to the capitalist system when you are pretending that things are pristine and they are not. Either the SEC should get very, very serious and prosecute a lot of people or forget about it."
I'd raise my hand for the second option there. "Systemic problem" solved.
It wasn't merely US mergers she was concerned about, though, despite the wording of that lead. She cited a study by the UK's answer to the SEC, their Financial Services Authority: that showed that in 2004, 29% of companies involved in mergers experienced abnormal trading before public announcements. The FSA also said that in 2001, the comparable figure had been 21%.
What accounts for the increase? Perhaps it simply became more difficult to keep a secret between 2001 and 2004.
Ms Morgenson also quoted a money manager named Herbert Denton: "Martha Stewart got hurt very badly for something that happens every single day on Wall Street. It's a falseness and a hollowness to the capitalist system when you are pretending that things are pristine and they are not. Either the SEC should get very, very serious and prosecute a lot of people or forget about it."
I'd raise my hand for the second option there. "Systemic problem" solved.
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