Aftermath of the Italian Elections: The Canary in the Coal Mine

Fortuna's Corner

There is such a disconnect between what the U.S. stock market is doing and how it is performing vs. the economic contraction in Europe and some weaker than expected numbers out of China lately.  I am reminded of the movie with the title, “Something’s Got To Give.”  Right now, the U.S. stock market has all the appearances of a trader’s market — buy the dips and sell the rips.  If you are a long-term investor you are better off staying heavily invested in equities right now — taking into consideration your risk tolerance, time horizon, etc.  Stay well diversified.  That said, I think that the election outcome in Italy is more problematic to our stock market than what we’re seeing today.  The risks of a “Euro car crash & implosion,” is real.  For the first time since Euro break-up fears of 18 months ago, there was a real push back against someone from outside…

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Beware Inside Traders: SEC has “57 Varieties” of Ways to Get You!

Securities News Watch

The SEC announced last Friday that it had obtained an emergency court order to freeze assets in a Zurich, Switzerland-based trading account that allegedly was used to reap more than $1.7 million in insider trading profits in advance of the February 14th announcement of the acquisition of the H.J. Heinz Company by Berkshire Hathaway and 3G Capital Partners. The case is noteworthy because of the speed of the SEC’s action and the fact that there is only the suspicion of insider trading.

According to the SEC complaint, “certain unknown traders engaged in highly suspicious and highly profitable trading in Heinz calls through an omnibus account located in Zurich, Switzerland.” The traders purchased 2,533 out-of-the-money June $65 call options, each of which would enable the holder to purchase 100 shares of Heinz stock for $65 per share before the calls expired on June 22, 2013. The SEC complaint termed this…

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Insider Trading Rules Need Rationalization

CLS Blue Sky Blog

The current scope of the insider trading prohibition is arbitrary and unrationalized.  Both sides in the debate should be able to agree on this, as the current scope is at the same time both underinclusive and overinclusive.  On the one hand, if a thief breaks into your office, opens your files, learns material, nonpublic information, and trades on that information, he has neither breached a fiduciary duty nor “feigned fidelity” to the source and is presumably immune from insider trading liability under current law.  On the other hand, if an employee of an acquiring firm seeks to test out information about a potential target with a friend at a major investor in the target and that investor later acquires more stock in the target based on that conversation, it is possible under SEC v. Obus that the employee will be deemed to have violated Rule 10b-5 on theory that he…

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Possible Insider Trading With Heinz Deal

marketsandwords

On February 15th, the U.S. Securities and Exchange Commission (SEC) sued “unknown” traders for “suspicious trading” of Heinz shares just one day before the takeover deal was announced. The trading came from a Goldman Sachs Group Inc. account based out of Zurich, Switzerland, and the traders in question earned a whopping $1.7 million.

 

The deal, a $23 billion takeover from Warren Buffet’s Berkshire Hathaway Inc. and Brazil’s 3G Capital Inc., is the largest deal ever in the food industry. The account that was used to trade the shares had never been used for Heinz before and the timing and amount of shares traded are highly suspect, says the SEC.

 

“The FBI is aware of trading anomalies the day before the Heinz announcement,” said Peter Donald, spokesman for the FBI’s New York office. “The FBI is consulting with the SEC to determine if a crime was…

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Mark Cuban Loses Bid To Dump Insider Trading Case

CBS Dallas / Fort Worth

DALLAS (AP) — A federal judge has denied a request by Dallas Mavericks owner Mark Cuban to throw out a civil lawsuit accusing him of insider trading.

U.S. District Judge Sidney Fitzwater issued an order Tuesday rejecting Cuban’s request for summary judgment against the Securities and Exchange Commission.

The SEC accused Cuban in 2008 of selling shares in Internet search company Mamma.com after receiving confidential information about a private stock offering at a discounted rate. The SEC’s lawsuit says Cuban avoided losses of more than $750,000 by selling when he did.

Cuban has fought the charges and says he never agreed to confidentiality when he received a call from the company CEO in 2004.

Fitzwater said the SEC has enough evidence for a jury to look at the case. Cuban declined to comment.

(© Copyright 2013 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten…

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13 Must Read Weekend Stock Stories for Monday

Can it stay that hi, wait until the next insider prosecutions take place !

24/7 Wall St.

Bull and BearIt may be the weekend, and the DJIA hit a new high this last week, but there is no such thing as any rest for the wicked. 24/7 Wall St. has identified 13 must-read weekend stock stories for investors to be on the ball for Monday, although the 13 stories may impact more than just one company.

Apple Inc. (NASDAQ: AAPL) was on last week’s list because it was at a new 52-week low and losing favor by the day. Shares listed lower this past week but ultimately closed up for the week. It is hard to celebrate a rise from $430.47 to $431.72 this last Friday, but that was the highest close of the week for Apple. What is starting to drive interest are these persistent rumors that Apple is aiming to launch a cheaper iPhone for emerging markets so that it can capture more market share and…

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