Insider Trading – No Excuses

There really are no excuses to leak or act on insider information of PUBLIC Companies. I blogged earlier in the week on the rise in greed and leaks and disgust in the wealthy people doing it .

I used to get tips like crazy in the 90’s. I acted on a few. Always lost . Always. I had no connections. In hindsight, thank goodness. It turned me off the whole stupid idea of getting rich quick in the stock market.

When I hear a tip today it goes in one ear and out the other.

Today, The New York Times has a great piece on the rejuvenation of the crime . Some key highlights:

The rash of cases may be partly attributable to the surge in the number and the size of deals. Unlike deals in the 1980s, when takeovers were often hostile, transactions today are usually friendly, which means that there are two groups of lawyers, bankers and company officials in possession of valuable inside information, not just one. Deals today are also supersize, with consortiums of private equity firms lining up seemingly every big bank on Wall Street to finance the buyout.

At the same time that deals and the number of people involved in deal-making have increased, the number of hedge funds has surged, with their traders looking for any competitive edge in information. As a result, the potential, and temptation, for information to be leaked is substantial.

Also,

“Everything is going global, even insider trading,” said Robert A. Marchman, executive vice president and head of market surveillance at NYSE Regulation.

Finally,

“Historically one of the challenges facing prosecutors is proving that communication took place between the tipper and the tipee,” said Ron Geffner, a lawyer at Sadis & Goldberg who previously worked at the S.E.C. “Advances in technology have helped prosecutors, not hurt them. We now have records of everything, unless it’s like ‘Goodfellas’ where everyone is actually meeting to talk.”

It’s great that we are actively dealing with this greed. We know better, especially the insiders.