but they were going to buy it anyways. i am talking straight insider trading, not pump and dump. the buyers were going to buy whether the insider sold or not. are you that dense. tell me how it negativeky impacts anyone????
you mean to think no one is one word. again, no one is answering my question. why is it bad? who loses?
BDGBDG, If you and I were 'MrBuyer' and we knew about the inside information that caused the insider to sell his shares, we wouldn't be buying at any price and neither would anyone else who new about it. The insider might be forced to sell at a far lower price, and we would've saved our money. All information about a publically traded company needs to be made public evenly and instantlaneously otherwise public confidence in shares would be greatly eroded.
The funny part is that he has a point, while you are all calling him dense and stupid. He may very well be, who knows. Let's look how this market really works, we all know that insider trading goes on and will keep going on. I think our congressmen proved that, they seem to always make great money with the healthcare/biotech sector. Yet not one is ever going to get charged, nor will the authorities even think about the very suspicious fact, even when the story is printed in a newspaper. But it's very different for the little guy. So the sheep are under the impression that insider trading is illegal and it really does not go on. If it was not illegal then most would know that greater than expected company earnings are well priced in, that information flow is constant, there is no such thing as "public" info. There is no reason for a person to assume that if MSFT announces horrible earnings that noone was dumping prior cause they were not legally allowed to do so. I am in no way stating that most would actually behave more rationally. R.O.S. talks about the public still behaving like sheep with the insiders playing them when insider trading was not illegal. And he gives very plain and clear advice on the matter. Interestingly enough, he talks about the "experts" and pumpers, which still exists today. CNBC anyone? Just something to think about. This law creates an edge for a certain group of people.
When the insider trading laws were established, there was a lot of argument along these lines. An economic efficiency argument was made that insider trading was just an efficient way of disseminating news or having it discounted by stock prices. In reality, insiders deemed it a perk of their position, just as people like Cramer considered it a perk of being a big commish generator to get the advance word on analyst upgrades, etc. The counter argument was that it was unfair and fraudulent. The seminal legal case on insider trading was the Texas Gulf Sulpher case. The company, late rknown as TexasGulf, had made an important mineral discovery, in Alaska as I recall. Insiders loaded up on shares before divulging the information. The SEC brought suit and prevailed under Rule 10b(5) of the Securities Exchange Act of 1934, which made it illegal to buy or sell a security while in possession of material nonpublic information. I believe the defendants argued that they had not violated the law as it was the company's information, not theirs. So the company could not have made open market purchases of stock, but they could. The U. S. Court of Appeals for the Second Circuit made short work of that defense.
I've seen a lot of threads... this one is right up there as one of the dumbest. I want the 1 min of my life back.