At a press conference announcing the latest insider trading busts, the government has admitted that it is turning those seeking to make the markets more efficient (by aggressively seeking out important information), more like drug dealers.
That's what happens when you start making more laws and stretch laws, you cause more and more of a society to protect themselves by using the methods of drug dealers.
"We allege some of the defendants [were] taking a page from the drug dealers' playbook [and] deliberately used anonymous, hard-to-trace, pre-paid cellphones in order to avoid law enforcement detection," federal prosecutor Preet Bharara told a news conference.
"When sophisticated business people begin to adopt the methods of common criminals, we have no choice but to treat them as such," he said.
It is absurd to say that they are treating those arrested as common criminals because they use pre-paid cellphones, as though they wouldn't have been arrested if they hadn't used pre-paid phones, or somehow been treated differently after being arrested.
Bharara sounds like a real life Hamilton Burger, and he is the new U.S attorney for the Southern District of New York.
Sharp defense attorneys are going to have a field day with this guy.
Showing posts with label InsiderTrading. Show all posts
Showing posts with label InsiderTrading. Show all posts
Thursday, November 5, 2009
Fourteen Charged By FBI for Hedge Fund Insider Trading
Update: The FBI has confirmed to CNBC that 7 people are in custody after being arrested in connection with an ongoing probe of insider trading in the hedge fund industry. The FBI says those arrested are employees of Galleon, Schottenfeld Group, law firm Ropes & Gray, and Incremental Capital.
A press conference is expected where it will be announced that the filing of criminal charges against 14 individuals has taken place.
A press conference is expected where it will be announced that the filing of criminal charges against 14 individuals has taken place.
Monday, November 2, 2009
Calvin Coolidge Traded on Inside Information and So Do Many More
Another perspective that shows SEC enforcement against selected insider trading targets is a waste of time, and actually damages the flow of information, through pricing, to markets.
By Andy Kessler
It happened almost every earnings season. My hedge fund would own a million shares in some company and two weeks before it was to report quarterly earnings, its stock would start dropping. There was no news to explain it. We were in the dark, even though it was my job to know. Inevitably, the company would report a disappointing quarter, missing Wall Street's earnings expectations by a penny or two. Someone knew. A salesman's brother-in-law heard a few deals didn't close. Or maybe an insider was singing.
The recent arrest of Galleon Group hedge fund's Raj Rajaratnam on insider trading charges puts a spotlight on this game. Is trading on industry knowledge widespread? Absolutely. That's how many hedge funds and mutual funds get an edge. Is insider trading also widespread? Only the Securities and Exchange Committee's wire-tappers know for sure.
Stock markets trade on information. Millions of people generate billions of trades every day. Each trade contains a tiny piece of information built into it. ("I think Apple is killing Nokia" or "I think GM is toast.") Eventually we are proved right or wrong, and we make money or we don't. In the long run, the market is always right. On any given day, your guess is as good as mine.
As long there have been markets, there have been those who have tried to get an edge. Whoever could get the first news from a battlefield, of an oil discovery, or figure out that a company's earnings were better than anyone expected could reap almost instant profits. Edward Calahan invented the stock ticker (later improved by Thomas Edison and Alfred Vail) just so J.P. Morgan could sit in midtown and get stock quotes from the New York Stock Exchange faster than anyone else. Everyone else had to wait for the Dow Jones Customers' Afternoon Letter with closing prices.
Read the entire article here.
By Andy Kessler
It happened almost every earnings season. My hedge fund would own a million shares in some company and two weeks before it was to report quarterly earnings, its stock would start dropping. There was no news to explain it. We were in the dark, even though it was my job to know. Inevitably, the company would report a disappointing quarter, missing Wall Street's earnings expectations by a penny or two. Someone knew. A salesman's brother-in-law heard a few deals didn't close. Or maybe an insider was singing.
The recent arrest of Galleon Group hedge fund's Raj Rajaratnam on insider trading charges puts a spotlight on this game. Is trading on industry knowledge widespread? Absolutely. That's how many hedge funds and mutual funds get an edge. Is insider trading also widespread? Only the Securities and Exchange Committee's wire-tappers know for sure.
Stock markets trade on information. Millions of people generate billions of trades every day. Each trade contains a tiny piece of information built into it. ("I think Apple is killing Nokia" or "I think GM is toast.") Eventually we are proved right or wrong, and we make money or we don't. In the long run, the market is always right. On any given day, your guess is as good as mine.
As long there have been markets, there have been those who have tried to get an edge. Whoever could get the first news from a battlefield, of an oil discovery, or figure out that a company's earnings were better than anyone expected could reap almost instant profits. Edward Calahan invented the stock ticker (later improved by Thomas Edison and Alfred Vail) just so J.P. Morgan could sit in midtown and get stock quotes from the New York Stock Exchange faster than anyone else. Everyone else had to wait for the Dow Jones Customers' Afternoon Letter with closing prices.
Read the entire article here.
Saturday, October 31, 2009
Madoff ‘Amazed’ He Wasn't Caught in 2006
US regulators failed to catch Bernard Madoff’s huge fraud in 2006 because they asked the wrong questions and did not perform “accounting 101”, the financier told the authorities earlier this year, according to documents released on Friday, FT is reporting.
In an interview in June – days before he was sentenced to 150 years in prison the biggest “Ponzi” scheme in history – Madoff told SEC it was “amazing” he had not been caught earlier.
The SEC is a joke. It is a very political organization that tends to go after unconnected high profile people, i.e., Martha Stewart and (currently) Mark Cuban-types. Even if they have to create theories out of thin air as to what laws may have been broken.
Yet, they rarely catch real fraud, and they stay miles away from big time connected signs of major insider trading.
They really should close down the SEC, and turn the SEC hedaquarters building in Washington DC over to the homeless that sleep just a block away in and around Union Station.
In an interview in June – days before he was sentenced to 150 years in prison the biggest “Ponzi” scheme in history – Madoff told SEC it was “amazing” he had not been caught earlier.
The SEC is a joke. It is a very political organization that tends to go after unconnected high profile people, i.e., Martha Stewart and (currently) Mark Cuban-types. Even if they have to create theories out of thin air as to what laws may have been broken.
Yet, they rarely catch real fraud, and they stay miles away from big time connected signs of major insider trading.
They really should close down the SEC, and turn the SEC hedaquarters building in Washington DC over to the homeless that sleep just a block away in and around Union Station.
Sunday, October 25, 2009
Why Miron's Theory On Insider Trading Fails
Harvard's Jeffrey Miron in a defense of insider trading has written:
Perhaps, Miron views technical analysis of stock movements as voodoo forecasting, and indeed some technical analytic theory is voodoo theory. However, technical analysis as a science that is deduced from human action can provide extremely accurate price signals and volume signals as to what is occurring in a stock. Insider trading happens to be one of the easiest trends to spot via technical analysis. Legalizing insider trading would add to the accuracy of these signals.
Bottom line: Insider trading is not only good for markets in general because it allows the markets to adjust to the best available information about a company, but such adjustment, in a way, actually puts the small investor in the boardroom by his ability to observe stock price activity that now includes the activity of insiders.
Legalizing insider trading would provide more information to small investors, and make it more likely they would be willing to trade in individual stocks.
In a world with no ban, small investors might fear to trade individual stocks and would face a greater incentive to diversify; that is also a good thing.This is a curious argument, since if insider trading were legal, markets would adjust quicker to an accurate market situation. A small investor may not be privy to insider board room secrets, but he certainly is privy, as is everyone else, to price action and volume action in a stock. Thus, when inside trading is legal, there is more information for the individual than during a period of no insider trading, i.e. it is easier for him to trade successfully. If a takeover is about to occur, and insiders are free to trade on this information, then the stock price will start climbing higher on heavy volume. This is important information for all investors, including small investors.
Perhaps, Miron views technical analysis of stock movements as voodoo forecasting, and indeed some technical analytic theory is voodoo theory. However, technical analysis as a science that is deduced from human action can provide extremely accurate price signals and volume signals as to what is occurring in a stock. Insider trading happens to be one of the easiest trends to spot via technical analysis. Legalizing insider trading would add to the accuracy of these signals.
Bottom line: Insider trading is not only good for markets in general because it allows the markets to adjust to the best available information about a company, but such adjustment, in a way, actually puts the small investor in the boardroom by his ability to observe stock price activity that now includes the activity of insiders.
Legalizing insider trading would provide more information to small investors, and make it more likely they would be willing to trade in individual stocks.
Learning to Love Insider Trading
By Donald J. Boudreaux
Time to stop telling horror stories. Federal agents are wasting their time slapping handcuffs on hedge fund traders like Raj Rajaratnam, the financier charged last week with trading on nonpublic information involving IBM, Google and other big companies. The reassuring truth: Insider trading is impossible to police and helpful to markets and investors. Parsing the difference between legal and illegal insider trading is futile—and a disservice to all investors. Far from being so injurious to the economy that its practice must be criminalized, insiders buying and selling stocks based on their knowledge play a critical role in keeping asset prices honest—in keeping prices from lying to the public about corporate realities.
Prohibitions on insider trading prevent the market from adjusting as quickly as possible to changes in the demand for, and supply of, corporate assets. The result is prices that lie.
And when prices lie, market participants are misled into behaving in ways that harm not only themselves but also the economy writ large.
Remember the 1970s-era price ceiling on gasoline? By causing prices at the pump to lie about the scarcity of oil, that price ceiling led Americans to waste untold hours waiting in lines to fuel their cars. Similar wastes occur when corporate assets are mispriced
Suppose that unscrupulous management drives Acme Inc. to the verge of bankruptcy. Being unscrupulous, Acme's managers succeed for a time in hiding its perilous financial condition from the public. During this lying time, Acme's share price will be too high. Investors will buy Acme shares at prices that conceal the company's imminent doom. Creditors will extend financing to Acme on terms that do not compensate those creditors for the true risks that they are unknowingly undertaking. Perhaps some of Acme's employees will turn down good job offers at other firms in order to remain at what they are misled to believe is a financially solid Acme Inc.
Eventually, of course, those misled investors, creditors and workers will suffer financial losses. But the economy as a whole loses, too. Capital that would otherwise have been invested in firms more productive than Acme Inc. never gets to those firms. So compared with what would have happened had people not been misled by Acme's deceitfully high share price, those better-run firms don't enhance their efficiencies as much. They don't expand their operations as much. They don't create as many good jobs. Consumers don't enjoy the increased outputs, improved product qualities and lower prices that would otherwise have resulted.
In short, overall economic efficiency is reduced.
It's in the public interest, therefore, that prices adjust as quickly and as completely as possible to underlying economic realities—that prices adjust to convey to market participants as clearly as possible the true state of those realities.
As argued forcefully by Henry Manne in his 1966 book "Insider Trading and the Stock Market," prohibitions on insider trading prevent asset prices from adjusting in this way. Mr. Manne, dean emeritus at George Mason University School of Law, pointed out that when insiders trade on their nonpublic, nonproprietary information, they cause asset prices to reflect that information sooner than otherwise and therefore prompt other market participants to make better decisions.
According to Mr. Manne, corporate scandals such as Enron and Global Crossing would occur much less frequently and impose fewer costs if the government didn't prohibit insider trading. As Mr. Manne said a few years ago in a radio interview, "I don't think the scandals would ever have erupted if we had allowed insider trading because there would be plenty of people in those companies who would know exactly what was going on, and who couldn't resist the temptation to get rich by trading on the information, and the stock market would have reflected those problems months and months earlier than they did under this cockamamie regulatory system we have."
Read the full article here.
Time to stop telling horror stories. Federal agents are wasting their time slapping handcuffs on hedge fund traders like Raj Rajaratnam, the financier charged last week with trading on nonpublic information involving IBM, Google and other big companies. The reassuring truth: Insider trading is impossible to police and helpful to markets and investors. Parsing the difference between legal and illegal insider trading is futile—and a disservice to all investors. Far from being so injurious to the economy that its practice must be criminalized, insiders buying and selling stocks based on their knowledge play a critical role in keeping asset prices honest—in keeping prices from lying to the public about corporate realities.
Prohibitions on insider trading prevent the market from adjusting as quickly as possible to changes in the demand for, and supply of, corporate assets. The result is prices that lie.
And when prices lie, market participants are misled into behaving in ways that harm not only themselves but also the economy writ large.
Remember the 1970s-era price ceiling on gasoline? By causing prices at the pump to lie about the scarcity of oil, that price ceiling led Americans to waste untold hours waiting in lines to fuel their cars. Similar wastes occur when corporate assets are mispriced
Suppose that unscrupulous management drives Acme Inc. to the verge of bankruptcy. Being unscrupulous, Acme's managers succeed for a time in hiding its perilous financial condition from the public. During this lying time, Acme's share price will be too high. Investors will buy Acme shares at prices that conceal the company's imminent doom. Creditors will extend financing to Acme on terms that do not compensate those creditors for the true risks that they are unknowingly undertaking. Perhaps some of Acme's employees will turn down good job offers at other firms in order to remain at what they are misled to believe is a financially solid Acme Inc.
Eventually, of course, those misled investors, creditors and workers will suffer financial losses. But the economy as a whole loses, too. Capital that would otherwise have been invested in firms more productive than Acme Inc. never gets to those firms. So compared with what would have happened had people not been misled by Acme's deceitfully high share price, those better-run firms don't enhance their efficiencies as much. They don't expand their operations as much. They don't create as many good jobs. Consumers don't enjoy the increased outputs, improved product qualities and lower prices that would otherwise have resulted.
In short, overall economic efficiency is reduced.
It's in the public interest, therefore, that prices adjust as quickly and as completely as possible to underlying economic realities—that prices adjust to convey to market participants as clearly as possible the true state of those realities.
As argued forcefully by Henry Manne in his 1966 book "Insider Trading and the Stock Market," prohibitions on insider trading prevent asset prices from adjusting in this way. Mr. Manne, dean emeritus at George Mason University School of Law, pointed out that when insiders trade on their nonpublic, nonproprietary information, they cause asset prices to reflect that information sooner than otherwise and therefore prompt other market participants to make better decisions.
According to Mr. Manne, corporate scandals such as Enron and Global Crossing would occur much less frequently and impose fewer costs if the government didn't prohibit insider trading. As Mr. Manne said a few years ago in a radio interview, "I don't think the scandals would ever have erupted if we had allowed insider trading because there would be plenty of people in those companies who would know exactly what was going on, and who couldn't resist the temptation to get rich by trading on the information, and the stock market would have reflected those problems months and months earlier than they did under this cockamamie regulatory system we have."
Read the full article here.
Thursday, October 22, 2009
Legalize Insider Trading
James Altucher makes the case:
For more on legalizing insider trading, see Larry Elder's interview of Professor Henry Manne.
- The more information in a market, any market, the more efficient prices become. If informed investors start buying or selling based on privileged information, asset prices will rise to their "correct" level. For instance, in the Hilton case, we probably would have seen a smooth progression of the stock price from 33 to 45 over the prior month as talks progressed, instead of the spike in just one day.
- Fraud will be exposed earlier. This is a very key point to the argument. Enron is an example where tens of thousands of investors got burned because they were piling into the stocks during the later stages of its fraud. If insiders were selling we would've seen a much swifter move down, and probable fraud exposed.
- Companies will either become more transparent, to keep the retail investor happy, or will themselves enforce secrecy rather than being complacent with the idea that the law somehow protects their secrets.
For more on legalizing insider trading, see Larry Elder's interview of Professor Henry Manne.
Wednesday, October 21, 2009
How Major Players Beat the SEC
The Securities and Exchange Commission has many convoluted rules that make little sense. In some areas it is near impossible to operate unless you find a way around the rules.
I was really shocked at the sloppy discussions going on by the players in the Galleon insider trading case. Since the SEC regs are usually goofy, there are usually ways around them.
I know an investor relations executive who never tries "to pump up" a client stock, since that would be illegal. What he does is "disseminate information, about a company, that the investment community might find attractive."
Talking open stuff on a telephone line is simply stupid. The real players talk in code. If they know a takeover is coming, they call up their buddy and tell them, "I have been looking at the balance sheet of XYZ company. My analysis tells me it's way undervalued."
Real slick operators create rumors for themselves.
The line from the movie, Wall Street, "Blue horseshoe loves Anacot Steel." is often repeated by lower rung Wall Streeters. But I wonder if they know what is really going on?
In the movie Gordon Gekko (Played by Michael Douglas) has Bud Fox (Played by Charlie Sheen)call up a financial newspaper and whisper to the reporter, "Blue horseshoe loves Anacot Steel."
Now, what is going on here is that Gekko is trying to create a paper trail. If he knows Anacot Steel is going to be taken over, he needs justification for buying the stock. He tips off a financial newspaper that something is brewing. They run a story. He buys the stock after the story runs. If the SEC questions him about the purchase, he can say, "I bought it after I saw the story in the paper."
Another tactic is for a major player to have an analyst "upgrade" his recommendation on a takeover target. Then he can say he bought it on the analyst upgrade.
The more and more regulations that enter a society, the more and more important it will be to talk code and find angles. George Bush I is a major code talker, as I have previously discussed.
If you don't know how to talk code, you better start learning. As regulations explode, you are going to need the ability. And, you better understand when someone is talking code to you, otherwise you are going to miss some great opportunities from those who really know how to do deal in a very regulated environment.
I was really shocked at the sloppy discussions going on by the players in the Galleon insider trading case. Since the SEC regs are usually goofy, there are usually ways around them.
I know an investor relations executive who never tries "to pump up" a client stock, since that would be illegal. What he does is "disseminate information, about a company, that the investment community might find attractive."
Talking open stuff on a telephone line is simply stupid. The real players talk in code. If they know a takeover is coming, they call up their buddy and tell them, "I have been looking at the balance sheet of XYZ company. My analysis tells me it's way undervalued."
Real slick operators create rumors for themselves.
The line from the movie, Wall Street, "Blue horseshoe loves Anacot Steel." is often repeated by lower rung Wall Streeters. But I wonder if they know what is really going on?
In the movie Gordon Gekko (Played by Michael Douglas) has Bud Fox (Played by Charlie Sheen)call up a financial newspaper and whisper to the reporter, "Blue horseshoe loves Anacot Steel."
Now, what is going on here is that Gekko is trying to create a paper trail. If he knows Anacot Steel is going to be taken over, he needs justification for buying the stock. He tips off a financial newspaper that something is brewing. They run a story. He buys the stock after the story runs. If the SEC questions him about the purchase, he can say, "I bought it after I saw the story in the paper."
Another tactic is for a major player to have an analyst "upgrade" his recommendation on a takeover target. Then he can say he bought it on the analyst upgrade.
The more and more regulations that enter a society, the more and more important it will be to talk code and find angles. George Bush I is a major code talker, as I have previously discussed.
If you don't know how to talk code, you better start learning. As regulations explode, you are going to need the ability. And, you better understand when someone is talking code to you, otherwise you are going to miss some great opportunities from those who really know how to do deal in a very regulated environment.
More Truth than Alan Murray Realizes
Alan Murray, WSJ Deputy Managing Editor and Executive Editor Online, wrote in a twitter post this morning:
If a takeover bid is coming, the closer the stock gets to the takeover bid, before it is announced the more efficient the markets are. You would feel like a really dumb schmuck if you sold a stock where a takeover bid was announced the next day and the price soared. Hedge funds buying the stock on expectations (or knowledge) of a pending not yet announced takeover are simply pushing the stock closer to the takeover price, thus A. alerting you to the fact that there is unusual activity in the stock so that you shouldn't sell just yet or B. If you do sell, the price is up so that you are less of a schmuck.
The only ones that have ethical problems are leakers of news who have a responsibility to keep their mouths shut.
In the Galleon Hedge Fund insider trading case, the analysts and traders should be given a pass, as do reporters who break takeover stories, they are all just making the markets more efficient. It is the leaker of information, such as the employee at the IR firm, Market Street Partners and the McKinsey & Co. partner, Anil Konumar, both leakers in the Galleon case, that have ethical problems. They broke and ethical understanding with their clients by revealing confidential information.
Fascinating story on analyst feeding info. to Galleon. These people sound like reporters -just get paid better. (subs) http://bit.ly/3g6ORiThis is actually very correct. What hedge fund analysts try to do is ferret out information as to what is going on at a company so that the traders at the hedge funds can act on this information WHICH MAKES THE MARKET MORE EFFICIENT.
If a takeover bid is coming, the closer the stock gets to the takeover bid, before it is announced the more efficient the markets are. You would feel like a really dumb schmuck if you sold a stock where a takeover bid was announced the next day and the price soared. Hedge funds buying the stock on expectations (or knowledge) of a pending not yet announced takeover are simply pushing the stock closer to the takeover price, thus A. alerting you to the fact that there is unusual activity in the stock so that you shouldn't sell just yet or B. If you do sell, the price is up so that you are less of a schmuck.
The only ones that have ethical problems are leakers of news who have a responsibility to keep their mouths shut.
In the Galleon Hedge Fund insider trading case, the analysts and traders should be given a pass, as do reporters who break takeover stories, they are all just making the markets more efficient. It is the leaker of information, such as the employee at the IR firm, Market Street Partners and the McKinsey & Co. partner, Anil Konumar, both leakers in the Galleon case, that have ethical problems. They broke and ethical understanding with their clients by revealing confidential information.
Saturday, October 17, 2009
Political Correctness at the SEC
The SEC has turned the concept of politically correct on its head. White anglos are rarely touched by them. They are the politically correct group to be protected at 100 F Street, Northeast. Others beware.Hedge fund operator and Sri Lankan native, Raj Rajaratnam has been busted on charges of trading on insider information. Others busted include, Anil Kumar and Rajiv Goel.
A couple of Caucasians brought up the rear: Danielle Chiesi, Mark Kurland and Robert Moffat.
Other ethnics the SEC has focused on in the past include Jews: Michael Milken, Dennis Levine, Ivan Boesky, Sam Waksal and Mark Cuban (A Russian Jew), and also Martha Stewart (She is Polish-Catholic).
When the SEC's isn't busting ethnics, it seems to specialize in insider traders who date strippers and the like. I'm not kidding. I think they must have a contest to see who can one up the other with hot babes at depositions.
James J. McDermott Jr got busted after he tipped off an X-rated movie actress he was dating.
Workers at Goldman Sachs and Merrill Lynch were busted as a part of an insider trading ring after using exotic dancers in their scheme.
Matthew Devlin a Lehman Brothers broker tipped Jamil Bouchareb who provided the information to his girlfriend, Maria Checa, a Playboy playmate. They all got busted.
Insider trading is an absurd crime--insider trading does nothing but make the market more efficent. There is as much wrong with insider trading as there is in drinking milk.
But, if you want to dabble a bit yourself, stay away from having ethnics or hot babes in your trading circle. And if you really want a little extra insurance that you won't get harassed by the SEC, get a Congressman in your circle. The SEC won't come near you.
And, if you are an ethnic, you better be a Goldman Sachs ethnic.
Thursday, October 8, 2009
The SEC as a Political Agency, Nothing More, Nothing Less
So the SEC continues to harass billionaire Mark Cuban, after Cuban and U.S. District Judge Sidney A. Fitzwater gave the SEC a major league facial in the SEC's over stretched case against Cuban.
It's clear to see that the SEC is really going after Cuban because of his in your face attitude in battling the SEC, in addition to his high profile.
Meanwhile, the SEC won't go near a case of real insider trading that appears to circle around members of Congress, where the market took off when only select few knew that Warren Buffett, in the middle of the financial crisis, was going to announce a multi-billion dollar investment in Goldman Sachs.
As ever, the SEC continues to act as the ultimate political influenced operator. They go after high profile people, such as Cuban and Martha Stewart, who do not have high powered political connections, but who have high profiles. And they go after them on extremely stretched interpretations of securities laws (Yes, I know that Stewart technically went to the can for false testimony, but the testimony was on a hyped up insider trading case) .
At the same time, this SEC harrasment goes on, the SEC has in the past, and continues, to ignore the flagrant warnings signs of fraud and insider trading by the politically connected, such as Bernie Madoff and those circling around the mysterious trading that occurred after a confidential briefing of some powerful congressional leaders.
It's clear to see that the SEC is really going after Cuban because of his in your face attitude in battling the SEC, in addition to his high profile.
Meanwhile, the SEC won't go near a case of real insider trading that appears to circle around members of Congress, where the market took off when only select few knew that Warren Buffett, in the middle of the financial crisis, was going to announce a multi-billion dollar investment in Goldman Sachs.
As ever, the SEC continues to act as the ultimate political influenced operator. They go after high profile people, such as Cuban and Martha Stewart, who do not have high powered political connections, but who have high profiles. And they go after them on extremely stretched interpretations of securities laws (Yes, I know that Stewart technically went to the can for false testimony, but the testimony was on a hyped up insider trading case) .
At the same time, this SEC harrasment goes on, the SEC has in the past, and continues, to ignore the flagrant warnings signs of fraud and insider trading by the politically connected, such as Bernie Madoff and those circling around the mysterious trading that occurred after a confidential briefing of some powerful congressional leaders.
Monday, June 15, 2009
Insider Trading in Congress? Very Suspicious Trading By Senate's No. 2 Democrat, Dick Durbin
This appears very big. It could involve insider trading by one or a number of members of Congress and their associates.
The Chicago Sun-Times is reporting that Illinois Senator Dick Durbin's financial disclosure statement shows that:
The announcement was made late on the 23rd after the stock market closed. The next day, Berkshire stock jumped in price by 3.5%. The climb in price should not come as a surprise since Buffett is viewed as one of the greatest investors of all time. If he were to announce, in the middle of a panic, that he was buying into Goldman Sachs, his stock would most assuredly climb since it was Warren Buffett putting a stamp of approval on the stock market and financial system. Who better to then take a ride with than Buffett by buying his stock? If you knew this in advance, it was sure profit.
In addition to Durbin's odd purchase, on the day he bought his stock, the 19th, there was unusually heavy trading in Berkshire stock. It was the highest volume day for the month and Berkshire stock was up 15% on that day. The market overall was up that day, but it is a lot more difficult to pin down who was buying the market overall, than it would be for investigators to take a look and see who was buying Berkshire on that day, in addition to Durbin. Further, Goldman stock climbed by more than 40% from its low on the 18th to its closing price on the 19th. It would be interesting to know who was buying that stock, given that just 4 days later Buffett was going to plow billions into the company.
There are many questions that need to be answered here UNDER OATH. Was the Berkshire purchase of Goldman stock discussed at the meeting between Paulson (the former Goldman CEO), Bernanke and Congressional leaders? Why on the day after the meeting did Durbin sell mutual fund positions to buy into Berkshire? A move which looks very odd, unless you knew some news was about to break on Berkshire.
Did any other congressional leaders or friends of congressional leaders buy stock in either Berkshire or Goldman on that day? Who did buy stock in Berkshire and Goldman to push the stocks up, in the middle of a panic? Will the Securities and Exchange Commission investigate?
The Chicago Sun-Times is reporting that Illinois Senator Dick Durbin's financial disclosure statement shows that:
... he sold mutual-fund shares worth $42,696 on Sept. 19, the day after thenTreasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke urged congressional leaders in a closed meeting to craft legislation to help financially troubled banks. The same day, he bought $43,562 worth of Berkshire Hathaway's Class B stock, the disclosure shows...Guess what happened 4 days later? On September 23, Berkshire Hathaway announced that it was investing $5 billion in Goldman Sachs.
The announcement was made late on the 23rd after the stock market closed. The next day, Berkshire stock jumped in price by 3.5%. The climb in price should not come as a surprise since Buffett is viewed as one of the greatest investors of all time. If he were to announce, in the middle of a panic, that he was buying into Goldman Sachs, his stock would most assuredly climb since it was Warren Buffett putting a stamp of approval on the stock market and financial system. Who better to then take a ride with than Buffett by buying his stock? If you knew this in advance, it was sure profit.
In addition to Durbin's odd purchase, on the day he bought his stock, the 19th, there was unusually heavy trading in Berkshire stock. It was the highest volume day for the month and Berkshire stock was up 15% on that day. The market overall was up that day, but it is a lot more difficult to pin down who was buying the market overall, than it would be for investigators to take a look and see who was buying Berkshire on that day, in addition to Durbin. Further, Goldman stock climbed by more than 40% from its low on the 18th to its closing price on the 19th. It would be interesting to know who was buying that stock, given that just 4 days later Buffett was going to plow billions into the company.
There are many questions that need to be answered here UNDER OATH. Was the Berkshire purchase of Goldman stock discussed at the meeting between Paulson (the former Goldman CEO), Bernanke and Congressional leaders? Why on the day after the meeting did Durbin sell mutual fund positions to buy into Berkshire? A move which looks very odd, unless you knew some news was about to break on Berkshire.
Did any other congressional leaders or friends of congressional leaders buy stock in either Berkshire or Goldman on that day? Who did buy stock in Berkshire and Goldman to push the stocks up, in the middle of a panic? Will the Securities and Exchange Commission investigate?
Sunday, May 17, 2009
More Details Emerge on Possible Insider Trading by SEC Enforcement Agents
The report issued by the Inspector General of the SEC is now available online.
Note the names of the SEC enforcement attorneys involved in the case have not been publicly revealed, they are identified by number. The report states that potential insider trading occurred in a "large financial services company" and also in a "global oil company".
The report reached the following conclusions:
Note the names of the SEC enforcement attorneys involved in the case have not been publicly revealed, they are identified by number. The report states that potential insider trading occurred in a "large financial services company" and also in a "global oil company".
The report reached the following conclusions:
Our investigation revealed suspicious activity, appearances of improprieties, and evidence of possible trading on nonpublic information, and/or potential insider trading, on the part of SEC Enforcement attorneys #l and #2 Because of the seriousness of the information that the OIG investigation uncovered; we have referred the matter to the United States Attorney's Office of the District of Columbia's Fraud and Public Corruption Section, which is conducting an investigation of possible criminal and civil violations together with the Federal Bureau of Investigation.The report also states that sworn testimony was taken from 13 SEC enforcement employees, including #1, #2 and #3, which suggests that #1 and #2 likely lied in sworn testimony a la Martha Stewart, in the midst of an insider trading investigation.
The OIG investigation disclosed that approximately two months before an investigation of a large health care company was opened in her Assistant group, #2 sold all of her shares of stock in the company. We also found that #2 purchased additional shares of a global oil company's stock both a few days and a couple of weeks after a formal investigation was opened by her friend who occupies the office next to her. [#2] also sold shares of that company's stock two days before an inquiry was opened in that matter.
We also found that both [# 1] and[# 2} traded in the stock of a large financial
services company, even though their fellow Enforcement attorney: [#3 ]became aware of three separate enforcement investigations of that company.[*3 ]credibly testified that she told [ #1 ]and [#2 ]during their regular weekly lunches that she could not purchase additional stock in this company because she had become aware of the investigations. Yet #1 and #2 did trade in this particular company, although incredibly, they both deny remembering #3 telling them about any of these investigations.
We also found that #2, #1 and #3 committed violations of different aspects of the SEC's securities reporting requirements of Rule 5.
Saturday, May 16, 2009
Real Insider Trading and the SEC
Economist Henry Manne has made a strong case that what the SEC generally prosecutes as insider trading should not be illegal.
Argues Manne:
The case is different, however, when government employees are accused of insider trading. I wrote last October:
The facts at this point suggest serious breaches by three SEC enforcement attorneys, one male and two females. Two of the three cases have been referred by the SEC's Inspector General (IG)to the Justice Department and FBI.
Female A according to a report from the IG:
Some clue as to what the inspector general suspects is that this case was referred by the IG to the DOJ and FBI.
The male involved appears to have decided to play "catch me if you can" with the IG. During questioning by the IG, he told the IG is "heart was pure". What kind of comment is that?
According to WSJ, this male:
This sounds an awful lot like an enforcement attorney who knows his trading (and a linked brother and sister-in-law) involved stocks where enforcement activities were ongoing, and he is not going to provide a list of what enforcement items he had been working on, to help the IG incriminate him. The IG will have to find other means to determine what enforcement actions the attorney was working on (and how they related to this attorney's trading and that of his brother and sister-in-law). And the IG has done just that since he has also alerted the DOJ and FBI to this case.
Also curious is female attorney B who told the IG that in weekly meetings with female attorney A and the male attorney that she
Now that this much information is out, the rest will leak out over time, including the identities of the SEC attorneys involved. There will be too many reporters working the story. The SEC will have a tough time burying this one. Get your popcorn ready.
Argues Manne:
It's very important in the world of finance that shares be accurately priced. There are many things that turn on that -- compensation does, the whole takeover field turns on it, people's investment decisions turn on it, so it's very important that we have actual reflection of what's going on. Well, how do you get that? The SEC says, well, we'll get reports that come out three or six months later, and that will inform the market of what's going on. That's baloney. The way the market works is that informed people do their trading, and every time they trade on good news, they drive the price up -- every time they trade on bad news, they drive the price down.I completely concur.
The case is different, however, when government employees are accused of insider trading. I wrote last October:
I have always contended that real ugly insider trading can only be done by government officials who are in a position to influence government escapades, and also take positions to profit from such.I bring this to the forefront as news of potential insider trading by SEC enforcement attorneys is developing.
The facts at this point suggest serious breaches by three SEC enforcement attorneys, one male and two females. Two of the three cases have been referred by the SEC's Inspector General (IG)to the Justice Department and FBI.
Female A according to a report from the IG:
...hadn't received clearance from the ethics office for 10 of the 247 transactions...It is going to be very interesting to learn about these 10 transactions. Was it simply a case of sloppy follow through that resulted in the failure to report the 10 transactions, or were the transactions such that if they would have been reported they would have sent out red flags to insider trading?
Some clue as to what the inspector general suspects is that this case was referred by the IG to the DOJ and FBI.
The male involved appears to have decided to play "catch me if you can" with the IG. During questioning by the IG, he told the IG is "heart was pure". What kind of comment is that?
According to WSJ, this male:
..works in the enforcement division's chief counsel office, a key position that vets all cases, ensures consistency across the division, and often offers advice to attorneys...Talk about a power positon from which to influence enforcement. Yet, he told the IG that he didn't keep a list of matters he has reviewed in the chief counsel's office. A bureaucrat, and a lawyer at that, not keeping CYA records, how likely is that?
This sounds an awful lot like an enforcement attorney who knows his trading (and a linked brother and sister-in-law) involved stocks where enforcement activities were ongoing, and he is not going to provide a list of what enforcement items he had been working on, to help the IG incriminate him. The IG will have to find other means to determine what enforcement actions the attorney was working on (and how they related to this attorney's trading and that of his brother and sister-in-law). And the IG has done just that since he has also alerted the DOJ and FBI to this case.
Also curious is female attorney B who told the IG that in weekly meetings with female attorney A and the male attorney that she
...learned there were at least three open investigations into [a] company...adding that she told the inspector general she had shared this information with her colleagues at lunch and by email. The report says the other two owned the stock at some point but doesn't say when. The two deny having been told of the investigations, the report said.This sounds to us as though there are also Martha Stewart obstruction of justice elements to the case, we have the male attorney and the female attorney A denying being informed of investigations on a particular company, but female attorney B told IG that she did inform the other two and there are corroborating emails. Are the male attorney and female attorney A lying to cover up the fact that they were trading on inside information?
Now that this much information is out, the rest will leak out over time, including the identities of the SEC attorneys involved. There will be too many reporters working the story. The SEC will have a tough time burying this one. Get your popcorn ready.
Friday, May 15, 2009
SEC Attorneys Under Investigation for Insider Trading
Two enforcement lawyers at the Securities and Exchange Commission are under investigation by the FBI for possible insider trading based on non-public information that came into their hands as SEC employees.
According to NYT, a female SEC enforcement attorney:
And a male SEC attorney:
NYT continues:
UPDATE More from WSJ:
The implications here are extremely serious. Unlike private citizens who trade on inside information, SEC enforcement attorneys have the ability to dramatically influence the prospects of a company as a result of their power to begin or halt an investigation. The possibility that some enforcement agents took positions or sold positions while investigations were on going is very alarming.
According to NYT, a female SEC enforcement attorney:
...was found to have spent much of her workday sending e-mail messages and scouring the Internet for information about stocks
And a male SEC attorney:
sent stock tips — sometimes from the female lawyer — to his brother and sister-in-law from his agency e-mail account.
NYT continues:
While it is not known how senior they were, the report says both have worked at the S.E.C. for “many years” and each made a salary of more than $167,000 a year.
A third lawyer in the enforcement division was found to have violated reporting requirements, but the inspector general found that her behavior “did not raise any concerns or suspicions about possible insider trading.”
The two lawyers under scrutiny for insider trading bought and sold stock of a financial services company after the third lawyer informed them of three separate investigations of the company.
UPDATE More from WSJ:
A report by the SEC's inspector general described multiple suspicious cases where the lawyers traded the stocks of companies around the time the companies were under investigation. The report concluded the lawyers had violated the agency's internal rules, and the case was taken up by the U.S. attorney's office in Washington, D.C., and the Federal Bureau of Investigation.
The report didn't identify the employees. One, who the report said had been with the SEC since 1981, is a female staff lawyer...The report said the other is a man who works in the enforcement division's chief counsel office, a key position that vets all cases, ensures consistency across the division, and often offers advice to attorneys.
The two plus another enforcement lawyer had a "standing lunch" on Monday where they often discussed stocks and financial markets, according to the report. It said one made more than 200 trades over two years...
The partially redacted inspector general report said the SEC has "essentially no compliance system" to detect potential insider trading. It said the agency didn't conduct spot checks on trading and the various offices that received trading reports didn't share information. The report recommended disciplinary action against the two employees, who both continue to work for the agency...
The female attorney under investigation was said to have traded 247 times from January 2006 through January 2008. The inspector general found that the woman hadn't received clearance from the ethics office for 10 of the 247 transactions...
Her male colleague owned about 15 to 20 stocks valued at about $150,000 when he testified to the inspector general in October, and traded 14 times over the same period, the report said. It said he told investigators he didn't keep a list of matters he has reviewed in the chief counsel's office. He maintained that while he did discuss stock picks with his brother, he didn't share nonpublic information with him, the report said. "My heart is pure," he told the inspector general.
The implications here are extremely serious. Unlike private citizens who trade on inside information, SEC enforcement attorneys have the ability to dramatically influence the prospects of a company as a result of their power to begin or halt an investigation. The possibility that some enforcement agents took positions or sold positions while investigations were on going is very alarming.
Monday, November 24, 2008
The Coming Bizarre Show Trial of Mark Cuban
"It's about cheap publicity," one of Mark Cuban's lawyers, Stephen Best, said to me over the phone as I tried to grasp the bizarre insider trading charges against Cuban.
"The SEC is suffering from bad publicity because of the way the markets have crumbled around them," said Best. "Mr. Cuban is high profile and they want to move the focus away from the way they have handled the crashing stock market."
I wanted to know who at the SEC he thought might be behind this. "Do you think SEC Commissioner Chris Cox is involved in this?", I asked. "Yes," Best answered without hesitation. (Note: Cox recused himself from the vote on whether Cuban should be charged because of a bizarre series of emails between Cuban and and Fort Worth-based senior SEC trial lawyer, Jeffrey Norris, who called Cuban unpatriotic. “Either you are really an anti-American ideologue or your allegiance to making money is significantly greater than your dedication to your country,” wrote Norris. Cox was cc'd on some of the emails.)
Most people's view of justice in America is that of prosecutors and regulators going after bad guys, after carefully weighing evidence. But some prosecutors indeed have what Cuban was quoted as calling "win-at-any-cost ambitions". And their eyes can get especially big when a high profile name is involved. It's great for the resume when you move on to the private sector and there's nothing like going back home to Thanksgiving dinner when you're the guy at the family table going after the big name.
Two of the SEC lawyers involved in the Cuban case seem to be win at any cost, bragging rights around the Turkey Day dining table, types. Best pointed out to me that one SEC attorney on Cuban's butt is Robert Kaplan. Kaplan was recently under Congressional investigation for possible misconduct. Another SEC attorney involved with the case, Scott Friestad, recently lost a case in North Carolina and the judge found it appropriate to rebuke Friestad's tactics during the trial.
Best promises their will be bombshells coming out about the SEC's conduct in the Cuban case. He points out that the SEC has done a number of things from minor to major that do not follow general SEC policy. On the minor end, the SEC generally calls a client's lawyers when a client is about to be charged by the SEC. The SEC did not extend this standard courtesy to Cuban's lawyers. No calls were made to them by the SEC before the charges were made public.
On a more serious note, the SEC in addition to investigating Cuban was investigating Mamma.com. Mamma.com is the company in which Cuban sold stock that prompted the SEC charges. Best points out a very crucial timeline that is critical to the charges against Cuban. There is no insider trading charges against Cuban unless the president of Mamma.com testifies that he told Cuban he was about to get inside information and that Cuban agreed not to sell any stock.
So Mamma.com is under investigation and the SEC closes the case against Mamma.com just days before the then CEO of Mamma.com, Guy Faure, is to be questioned by the SEC about what was or was not said to and by Cuban. Best certainly is implying this timeline suggests that someone got to the SEC and let them know Faure would deliver Cuban on a platter, if Mamma.com was taken off the platter.
Now to the charge itself.
There are many sound economists who believe that there is nothing at all wrong with insider trading, see here and here. But the charges against Cuban are truly taking the concept of insider trading to a new bizarre outlier that could literally give CEO's the power to halt the selling of any major stockholder at anytime. With CEO's pulling down multi-million dollar salaries that are coming under attack,it shows just how desperate the SEC is to win some kind of case, somewhere against some "name" that they will literally create a tool under which CEO's will be able to freeze shareholders from selling stock whenever they want.
Here's what I mean. The charge against Cuban is that he received a call from Faure when Faure was president of Mamma.com and that Faure said to Cuban that he was about to give him some inside information. The inside information being that Mamma.com was about to sell more stock to raise more money.
Now there is nothing in writing about this, just a "he said , she said" between Cuban and Faure. If Faure really wanted to convey inside information to Cuban, he could have very easily have documented the disclosure by having Cuban sign a standard non-disclosure document. Faure did not do this.
In truth, the way it likely went down is that Faure was desperate for cash and decided to contact big bucks Cuban to see if he would invest more money. Upon hearing Faure's plan, Cuban must have thought this guy is a f#*king idiot and sold his stock. If it went down this way, there is no insider trading case.
There is only a case if the desperate Faure would have spent time, before asking Cuban for money, spouting off legalese about insider trading. How likely is that?
This is where the timeline Best emphasises comes into play. Who knows what the SEC found out about Mamma.com and Faure when they conducted their investigation of Mamma.com or who knows what Faure feared they might discover? So at this point you have an SEC looking for some good publicity and a possibly desperate Faure. If they charge Faure with anything, who is going to pay attention? But if Faure plays ball and suddenly "remembers" he turned into a legal gusher warning Cuban of all sorts of things during their phone call and that he then "remembers" that Cuban acknowledged Faure's gusher of legalese, then the SEC has Cuban as its target and you get regular national news coverage and as a bonus you get coverage on ESPN.
That's the case and it is hard to see how the facts in this case go anywhere near "beyond a reasonable doubt". It will be a major surprise if the SEC wins this case. But let's say they do somehow win. What they will have done is create a tool for fat cat CEO's to stop major shareholders from selling their stock. It will become known as a "Cuban situation."
Suppose a CEO fears a major shareholder may be selling stock or fears he might start selling stock, if the SEC wins its case against Cuban, then all the CEO has to do is call the shareholder up and tell him he is thinking of selling more stock in the company. This will freeze that shareholder from selling stock, as his stockbroker and his lawyer will remind him of what happened to Cuban, who received such information by phone.
The SEC, of late, has been marked by very little in the way of deep thinking. The latest charge against Cuban is more along this line. If the SEC succeeds in this case, it will do nothing but create another tool for fat cat CEOs to use against common shareholders.
UPDATE: Steve Best, one of Cuban's lawyer, writes: "The legal standard of proof in a civil case is beyond a preponderance of the evidence-- you cited the criminal standard."
"The SEC is suffering from bad publicity because of the way the markets have crumbled around them," said Best. "Mr. Cuban is high profile and they want to move the focus away from the way they have handled the crashing stock market."
I wanted to know who at the SEC he thought might be behind this. "Do you think SEC Commissioner Chris Cox is involved in this?", I asked. "Yes," Best answered without hesitation. (Note: Cox recused himself from the vote on whether Cuban should be charged because of a bizarre series of emails between Cuban and and Fort Worth-based senior SEC trial lawyer, Jeffrey Norris, who called Cuban unpatriotic. “Either you are really an anti-American ideologue or your allegiance to making money is significantly greater than your dedication to your country,” wrote Norris. Cox was cc'd on some of the emails.)
Most people's view of justice in America is that of prosecutors and regulators going after bad guys, after carefully weighing evidence. But some prosecutors indeed have what Cuban was quoted as calling "win-at-any-cost ambitions". And their eyes can get especially big when a high profile name is involved. It's great for the resume when you move on to the private sector and there's nothing like going back home to Thanksgiving dinner when you're the guy at the family table going after the big name.
Two of the SEC lawyers involved in the Cuban case seem to be win at any cost, bragging rights around the Turkey Day dining table, types. Best pointed out to me that one SEC attorney on Cuban's butt is Robert Kaplan. Kaplan was recently under Congressional investigation for possible misconduct. Another SEC attorney involved with the case, Scott Friestad, recently lost a case in North Carolina and the judge found it appropriate to rebuke Friestad's tactics during the trial.
Best promises their will be bombshells coming out about the SEC's conduct in the Cuban case. He points out that the SEC has done a number of things from minor to major that do not follow general SEC policy. On the minor end, the SEC generally calls a client's lawyers when a client is about to be charged by the SEC. The SEC did not extend this standard courtesy to Cuban's lawyers. No calls were made to them by the SEC before the charges were made public.
On a more serious note, the SEC in addition to investigating Cuban was investigating Mamma.com. Mamma.com is the company in which Cuban sold stock that prompted the SEC charges. Best points out a very crucial timeline that is critical to the charges against Cuban. There is no insider trading charges against Cuban unless the president of Mamma.com testifies that he told Cuban he was about to get inside information and that Cuban agreed not to sell any stock.
So Mamma.com is under investigation and the SEC closes the case against Mamma.com just days before the then CEO of Mamma.com, Guy Faure, is to be questioned by the SEC about what was or was not said to and by Cuban. Best certainly is implying this timeline suggests that someone got to the SEC and let them know Faure would deliver Cuban on a platter, if Mamma.com was taken off the platter.
Now to the charge itself.
There are many sound economists who believe that there is nothing at all wrong with insider trading, see here and here. But the charges against Cuban are truly taking the concept of insider trading to a new bizarre outlier that could literally give CEO's the power to halt the selling of any major stockholder at anytime. With CEO's pulling down multi-million dollar salaries that are coming under attack,it shows just how desperate the SEC is to win some kind of case, somewhere against some "name" that they will literally create a tool under which CEO's will be able to freeze shareholders from selling stock whenever they want.
Here's what I mean. The charge against Cuban is that he received a call from Faure when Faure was president of Mamma.com and that Faure said to Cuban that he was about to give him some inside information. The inside information being that Mamma.com was about to sell more stock to raise more money.
Now there is nothing in writing about this, just a "he said , she said" between Cuban and Faure. If Faure really wanted to convey inside information to Cuban, he could have very easily have documented the disclosure by having Cuban sign a standard non-disclosure document. Faure did not do this.
In truth, the way it likely went down is that Faure was desperate for cash and decided to contact big bucks Cuban to see if he would invest more money. Upon hearing Faure's plan, Cuban must have thought this guy is a f#*king idiot and sold his stock. If it went down this way, there is no insider trading case.
There is only a case if the desperate Faure would have spent time, before asking Cuban for money, spouting off legalese about insider trading. How likely is that?
This is where the timeline Best emphasises comes into play. Who knows what the SEC found out about Mamma.com and Faure when they conducted their investigation of Mamma.com or who knows what Faure feared they might discover? So at this point you have an SEC looking for some good publicity and a possibly desperate Faure. If they charge Faure with anything, who is going to pay attention? But if Faure plays ball and suddenly "remembers" he turned into a legal gusher warning Cuban of all sorts of things during their phone call and that he then "remembers" that Cuban acknowledged Faure's gusher of legalese, then the SEC has Cuban as its target and you get regular national news coverage and as a bonus you get coverage on ESPN.
That's the case and it is hard to see how the facts in this case go anywhere near "beyond a reasonable doubt". It will be a major surprise if the SEC wins this case. But let's say they do somehow win. What they will have done is create a tool for fat cat CEO's to stop major shareholders from selling their stock. It will become known as a "Cuban situation."
Suppose a CEO fears a major shareholder may be selling stock or fears he might start selling stock, if the SEC wins its case against Cuban, then all the CEO has to do is call the shareholder up and tell him he is thinking of selling more stock in the company. This will freeze that shareholder from selling stock, as his stockbroker and his lawyer will remind him of what happened to Cuban, who received such information by phone.
The SEC, of late, has been marked by very little in the way of deep thinking. The latest charge against Cuban is more along this line. If the SEC succeeds in this case, it will do nothing but create another tool for fat cat CEOs to use against common shareholders.
UPDATE: Steve Best, one of Cuban's lawyer, writes: "The legal standard of proof in a civil case is beyond a preponderance of the evidence-- you cited the criminal standard."
Friday, July 11, 2008
Israeli Warplanes Practice in Iraq; US Bases in Iraq Might Serve as Platform for Iran Attack; Oil At New Record High
I have a sense someone is making a good buck on these Israeli exercises. If you are in the know , buy oil just before the news breaks. That's what I call real insider trading.
The Jerusalem Post reports:
Israel Air Force (IAF) war planes are practicing in Iraqi airspace and land in US airbases on the country as preparation for a potential strike on Iran, sources in the Iraqi Defense Ministry told a local news network, Friday.
The report, carried also by Iranian news outlets, claimed that recently massive nocturnal activity by IAF craft was noted in several American held airbases, including measures by the US army to increase security around the bases
According to the sources, former military officers in the Anbar province said IAF jets arrive during the night from Jordanian airspace, enter Iraq's airspace and land on a runway near the city of Hadita. The sources estimated the jets were practicing for a raid on Iran's nuclear sites.
The sources also said the American bases in Iraq might serve as a platform for the IAF from which to attack Iran. If Israeli warplanes will take off from Iraq, they can reach Bushehr in five minutes - a "record time," the sources said.
As a result of the reports on the exercise, by midday in Europe, light, sweet crude for August delivery rose $3.53 at $145.18 a barrel electronic trading on the New York Mercantile Exchange. Prices at one point jumped well over $4 to a record $145.98.
The Jerusalem Post reports:
Israel Air Force (IAF) war planes are practicing in Iraqi airspace and land in US airbases on the country as preparation for a potential strike on Iran, sources in the Iraqi Defense Ministry told a local news network, Friday.
The report, carried also by Iranian news outlets, claimed that recently massive nocturnal activity by IAF craft was noted in several American held airbases, including measures by the US army to increase security around the bases
According to the sources, former military officers in the Anbar province said IAF jets arrive during the night from Jordanian airspace, enter Iraq's airspace and land on a runway near the city of Hadita. The sources estimated the jets were practicing for a raid on Iran's nuclear sites.
The sources also said the American bases in Iraq might serve as a platform for the IAF from which to attack Iran. If Israeli warplanes will take off from Iraq, they can reach Bushehr in five minutes - a "record time," the sources said.
As a result of the reports on the exercise, by midday in Europe, light, sweet crude for August delivery rose $3.53 at $145.18 a barrel electronic trading on the New York Mercantile Exchange. Prices at one point jumped well over $4 to a record $145.98.
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