rgelite, Coincidentally, I read the latter of the two articles you cited just before writing my earlier post. (I wanted some background on the ImClone/Waksal case, did a Yahoo search for "ImClone Sam", and that article was at the top of the list.) I agree that no one owes an honest answer to a potential axe murderer. The FDA may very well fit that description, from ImClone's point of view. Since it is impossible to market a drug within the US without FDA approval, the agency has absolute power over all pharmaceutical companies. And if that power is misused - whether from malice, ignorance, corruption, politics, or simple incompetence - there is no easy recourse. However, the honesty I referred to was not honesty to the axe-wielding FDA, but honesty and fair dealing to the non-family investors of ImClone. And to the rest of the investment community, for that matter - even the day-traders and short-sellers. You may not be funding ImClone's startup expenses by buying shares in the secondary market long after the IPO, but the IPO was only made possible by the existence and promise of that secondary market. Public equity markets are made possible by a large package of contractual agreements and by the force of law behind those contracts, and the insider trading regulations are part of that contractual package. The high valuation of ImClone's stock, and the liquidity which enabled the Waksals to sell their stock at a moment's notice, are benefits that public equity markets provide, but those benefits aren't free - you must agree to play by the rules when you decide to go public. And unlike the situation with the FDA, no one is forced to go public to succeed. There is a substantial private equity market; one can build a very large and successful company without going public - look at how big Microsoft got long before their IPO. (Actually they are an unusual case as they were profitable and self-funded from the very beginning, and never had to raise any kind of venture capital. But I digress.) The "mechanisms in the market in which all of us can detect when a corporate officer is buying/selling shares" - those filings are required by the rules which regulate insider trading, the same rules which I am defending here. Those rules were written to protect the "public", but insofar as they increase transparency and accountability they benefit everyone (including corporate founders) by increasing the public's willingness to participate in the market on a somewhat level playing field. As to the morality of destroying one's values, I may be too idealistic on this one but I think that one's values should include a sense of personal responsibility to one's shareholders, and not just the ones that are close family or friends. Now... if the FDA did screw Dr Samuel Waksal for reasons other than prudent science, then I wish he had pulled a Rearden defense in court. It very possibly would have worked, and it certainly would have put the FDA approval process up for a lot of scrutiny. I'm probably being too hard on him. I agree that creators and innovators have a very different focus than lawyers, and that he was looking out for his family, and undoubtedly not thinking clearly under pressure. He would have fared better if not for the post-bubble desire to see someone punished for wrongdoing, however minor; so would have Martha. One thing I'm puzzled about: I was under the impression from the original news reports that Waksal had learned of the FDA decision the day before it was announced and had rushed to sell (and tipped off his family) - very much an "insider trading" situation. However, the "Witch Hunt" article you cited makes it sound quite a bit more innocent. Someone is putting spin on the story; I'm just not sure who it is.
Rg, I lean on many issues toward the libertarian side, but there are also many areas that I prefer regulation... As Average Joe consumer I like being able to walk, with some modicum of confidence, into a public building without diligently researching who the architect, engineer and constructor were. I could perhaps with research find out if any of the above contributors are "jokers", but then that research could take up quite a bit of my time and I really just want to run inside and use the restroom as I pass by without the building falling on me. As Average Joe consumer I like being able to partake of food, with some modicum of confidence, at public restaurants without diligently researching the owner, operator, chef, staff and food chain all the way back to the farmer. I could perhaps with research find out if any of the above contributors are "jokers", but then that research could take up quite a bit of my time and I really just want to run inside and grab a piece of pie as I pass by without getting food poisoning. As Average Joe consumer I really like being able to buy medications, with some modicum of confidence, without diligently researching the researcher, validator, manufacturer, distribution chain and pharmacist. I could perhaps with research find out if any of the above contributors are "jokers", but then that research could take up quite a bit of my time and I really just want to grab some antihistamines for my runny nose without croaking. As Average Joe consumer I really like being able to buy stock in public companies, with some modicum of confidence, without diligently researching the founders, IPO underwriters, board members, employees, etc. I could perhaps with research find out if any of the above contributors are "jokers", but then that research could take up quite a bit of my time and I really just want to buy into a company and not fear that I just bought into a Ponzi scheme. Are our current systems perfect regarding the above? Emphatically NO!. Are they better than the 'everyone does their own thing and everyone must research everyone and everything before entering, eating, medicating and purchasing' system? In my mind emphatically YES! JB
Turok, I agree with you in the practical need we have to trust experts in many mundane affairs that don't warrant a personal, repeated research project for every action we take. Definitely. I believe in most cases private research firms that I/we pay to certify such things would do equally well, whether we pay directly for that information/certification or via a built-in cost associated with products whose providers are proud to get certified. Underwriters and Consumers Reports are good examples, though not perfect ones. Competition, again in a classic Capitalist style, would provide the incentive to produce value in the certification and maintain a solid reputation.
brother...... no offense, but you're in need of some serious help with respect to issues of morality and ethics based upon what I and others have read from you on this thread! And so is the author of that absurd anarchist article that you reference. Apparently in your mind certain lying and dishonesty is part of the human condition so why legislate against same, and in favor of fair play in business and commerce. Is that your view of life on this planet??! We're all sure you would have no objection if someone defrauded you, lied to you or acted dishonestly. Right!!!! Guys who make remarks like you and the author of that article share one value... hypocrisy IMHO. All that confused crap you wrote above is just some ego-based intellectual academic hogwash without any real justifiable message concerning values and accountability under the laws of man, and of God. Under your distorted views someone could go rob a bank tomorrow with impunity long as they did not "harm" anyone in the process and were: "trying to protect his or her own interests, same as everyone else.". Meaning they needed or wanted the money! One is playing a sport at a local tournament and one of your competitors bribes the umpire or referee to make calls his or her way.. You'd have no objection!? So what if a little league umpire calls balls/strikes differently for his "friends" team than for your son's! Corked bats are ok in your world. Steroids are ok in your world. Bribing an ice skating judge to give a better mark to one skater over another is ok. That is the implication of your tortured logic. In fact in your world there is no equality. The privileged "deserve" to have access to information that others don't get in the financial markets. In your world there is one defining line of demarcation... money. Ain't that it bro. Did you grew up in a very wealthy or well-to-do household and never developed much empathy for the millions of decent persons who actually have to abide by the rules. Are we wrong there?! But hopefully there are only a handful of "thinkers" like you... as this sorry planet is in bad enough shape already from too many spoiled sociopathic, narcissistic hypocrites who 'sound' just like you. :eek: In fact martha stewart is at the head of that class. Next time try producing something that makes some sense in support of your "argument/contention" that insider trading and similar unfair and privileged behavior... is AOK. ICe
Once again, the examples you provide are YOUR strawmen. Enjoy yourself knocking yourself down. But to the essentials of the discussion, the only thing I have to say to you at this point is, we disagree.
And I don't want to have to do "Consumer Reports" research on a building to take a leak. I don't want to have to stop at the door and look for the 'Building Inspectors of America"(a hypothetical reputable organization) seal of approval. I don't want to have to research the owner/building manager to see if they are the type to post a 'Building Inspectors to America' (a similar sounding but nonexistent organization) seal of approval. I don't want to have to research the owner/building manager to see if they are the type to post a counterfeit 'Building Inspectors of America" seal of approval on the door. I just want to take a leak without the building falling on me. This requires teeth that is difficult to duplicate outside of government. JB
Diode, That's interesting, that it might be spun in that way. I need to review the history again. Thanks. As to the so-called "crime" of insider trading, it might be that we view the primary and secondaries differently? I see Waksal as the primary, with a clear distinction between what stock traders and investors are focused on, and what he is, and acknowledging their respective roles, particularly in the flow of information. I'm getting (but perhaps misunderstanding) that you see it more as a synergistic and contractual relationship with implied, if not outright, responsibilities for Waksal to participate in furthering the devaluation of his own shares. You would maintain (and, correct me if I'm not getting it) that then and only then would it be moral (to you) for Waksal to attempt to sell his shares (as would be the case if he just announced, "Hey, the hatchet wielding FDA monster is about to kill us. Everybody sell NOW.") If that's your position, we disagree. And I fully understand (and hope everyone does) that I'm not arguing about what the law is, but rather how I'd prefer it be. As I've said, he doesn't have a moral basis for sacrificing himself in my world view. Not under ANY circumstances does he have a moral responsibility to sacrifice himself. To me, the implied contract between a Waksal and the shareholders going in would be that it's expected he knows more than the rest of us and will act on it first. I wouldn't want it any other way. And I realize that my point of view no doubt sounds very ruthless so we may have to agree to disagree on this point. Which is why I said I'm not a Libertarian, though I find common ground in much on which it's based (AR). Good chatting.
Not necessarily. It only requires the "teeth" of the government the first few times. Soon, everyone will want their buildings certified so that we can take our leaks without incident, because they won't want to be sued by our families when Fox News, in covering the collapse of the building where we were taking a leak (not together, mind you), gets a bird's eye view of what we had been holding when we were knocked unconscious. Laurie Dhue: And here is rgelite with his 3 legs. And here we have Turok, with his kid's soccer ball. Fortunately no children were found in the wreckage. [Aside: Turok may also have 3 legs. If that's the case, no need to assign me the soccer ball.] There are plenty of ways to get this done without involving the guys with guns, and before anyone's rights are actually violated. I've named a few but there are mountains of private professional agencies that do just that. Besides, buildings fall anyway, whether or not public inspectors have been bribed. Government is not a guarantee; in fact, some could cite ample examples that it is the worst of all possible choices when other alternatives are available. Cheers.
I'm not sure why you consider Waksal to be 'sacrificing himself' if he holds onto his shares instead of dumping them. If his company fares poorly, why shouldn't he feel the hurt in the form of a reduced stock price? Besides, the principal-agent problem is already bad enough with execs and their empire building, their myopia: focus on jacking up the short-term stock price so they can exercise options, and their lavish perks. Take away insider trading regulations and won't that exacerbate the principal-agent problem? There'll just be an even bigger disconnect as execs will over-promise and give outrageous guidance to jack up their stock in the short-term and take out-sized risks to try and meet the guidance. If by luck it works, they cash some chips in and repeat the process for the next quarter. If not, they'll dump their shares and cash out at the artificially high price before the company warns for the quarter. Are you sure you would want it that way?