im actually shocked at what i just heard

[ElCubano]

Quote from Spearhead:

If I'm the residential owner that sold out to the guy, and my real estate broker didn't tell me about the zoning change, I probably have grounds for a lawsuit.

I do think this is one of the ways for corrupt politicians to enrich themselves. Happens a lot in developing nations.

but it is not illegal and the person buying it would not go to jail. Besides, the realtor would have no idea, because it is not public information yet.

also, inside information cases arent easy to prosecute, specially for hedge funds that are in and out of positions all day... these cases are prbably brought forth by wistle blowers

 

[Spearhead]

Quote from ElCubano:

but it is not illegal and the person buying it would not go to jail.

Not sure why the need for analogies.

You think insider trading doesn't hurt individual investors and it should be legalized "a little bit". I think it does hurt individual investors more than they're aware of, but I do think the general population is a flock of sheep anyway so I do the best I can to protect myself and spend my time worrying about things that affect me personally.

 

[stock777]

Quote from Spearhead:

Thanks. This is the only post here that makes any sense. I can't fathom how insider trading can possibly help the small investor unless you're selling a TA system and want to spin an argument for your system.

Yes, I find I'm frequently the voice of reason here.

 

[Pekelo]

If insider trading is legal, that can be missused for market manipulation, specially if the market participiants are well known.

What if a bunch of boardmembers suddenly start to sell their company's stock? The implication would be that they must know something what we don't. So the price would start to drop too. Then once the price dropped a signifficant %, the same boardmembers can start to buy back the very same stocks.

And it is possible that there was absolutely no upcoming news from the company, they just used their position to effect the market. Since they knew they were being watched as insiders, they acted in tandem and the market followed them in both directions....

They don't have to have size, they just have to have insider positions...

 

[Spearhead]

Quote from Pekelo:

If insider trading is legal, that can be missused for market manipulation, specially if the market participiants are well known.

What if a bunch of boardmembers suddenly start to sell their company's stock? The implication would be that they must know something what we don't. So the price would start to drop too. Then once the price dropped a signifficant %, the same boardmembers can start to buy back the very same stocks.

And it is possible that there was absolutely no upcoming news from the company, they just used their position to effect the market. Since they knew they were being watched as insiders, they acted in tandem and the market followed them in both directions....

They don't have to have size, they just have to have insider positions...

This happens every day, but not being done by board members but being done by computers.

 

[trefoil]

Quote from Spearhead:

If I'm the residential owner that sold out to the guy, and my real estate broker didn't tell me about the zoning change, I probably have grounds for a lawsuit.

I do think this is one of the ways for corrupt politicians to enrich themselves. Happens a lot in developing nations.

George Washington Plunkitt

I'm sure every large American city had/has one.

 

[ElCubano]

Quote from Pekelo:

If insider trading is legal, that can be missused for market manipulation, specially if the market participiants are well known.

What if a bunch of boardmembers suddenly start to sell their company's stock? The implication would be that they must know something what we don't. So the price would start to drop too. Then once the price dropped a signifficant %, the same boardmembers can start to buy back the very same stocks.

And it is possible that there was absolutely no upcoming news from the company, they just used their position to effect the market. Since they knew they were being watched as insiders, they acted in tandem and the market followed them in both directions....

They don't have to have size, they just have to have insider positions...

This is collusion.

 

[nutmeg]

What if a bunch of boardmembers suddenly start to sell their company's stock?

Board members have accounts somewhere. How about this? Insider phones into gs or whoever, any red flags flyiing?


Suppose an insider is your client, they give you a call. Now your firm has a adequate capital account. How would you trade it?

 

[david666]

Quote from GTG:

One point that I've never seen addressed by those who say that insider trading should be legal is the bad incentives it would create for the management of public companies. In a world where insider trading is legal, the CEO has dual incentives. He can make money the hard/slow way by growing the company, or he can make money the easy/fast way by manipulating the stock price and profiting from trading those manipulations. We are all better off when the senior management has incentives that encourage growing the company rather than manipulating the market. Another problem is that in virtually all bankruptcies we'd see the CEO walking away making a fortune from shorting their own stock. It creates public anger when a CEO runs a company into the ground, and then walks away with a golden parachute. Golden parachutes are nothing compared to what could be made from shorting the stock ahead of everyone else. Imagine if the CEO of AIG made 4 billion dollars from shorting AIG stock? The public would be furious. I wonder if capitalism and democracy could even survive in a world where that kind of thing happened on a regular basis.

It wouldn't create those incentives because they are already there look at what enron did to prop its stock price up. Paying executives in stock options creates those incentives

 

[Spearhead]

Quote from david666:

It wouldn't create those incentives because they are already there look at what enron did to prop its stock price up. Paying executives in stock options creates those incentives

How do you explain Rajat Gupta?

Don't tell me an officer with a high 6-figure salary won't want a quick 7-figure payout. Greed rules.