Ted, Re..What you were reading were excerpts from the article, the link to which I had posted previously to Tench. You might want to read the full section on GWB in the article before making your call<<<<<<<<<<
Here is one part of that article.
In June 1990, Junior suddenly unloaded the bulk of his Harken stock -- 212,140 shares -- for a tidy $848,560. A former business associate says that Junior's motivation was his desire to buy an expensive new house in Dallas, for which he wanted to pay cash. The June 1990 transaction was an insider stock sale, and security laws required that it be reported no later than July 10, 1990. But Junior filed no such report, at least not then. <<<<<<<
This is one paragraph you are referring to. Note the reporter says that security laws required it to be reported. I agree in my reply to you that is was supposed to be reported. But nowwhere in that paragraph does the reporter accuse GW of insider trading; which is different from an insider stock sale. number 1 and number two; nowhere does the reporter say that not reporting causes insider trading. By law I have to file my quarterly payroll reports by the 30th of the month following the quarter. If I don't file on time, I am subject to a fine, but it isn't a crime unless I intentionally report the wrong numbers. Same here, Gw is subject to a fine if he intentionally didn't report the sale. But the punishment is a misdemeanor, not a felony.
Were government secrets discussed, directly or indirectly, that would have given Harken Energy a leg up in exploiting the Bahrain deal? The White House won't say. If Junior traded on exclusive, nonpublic, insider information, he committed a gross violation of SEC rules. <<<<<<
You will note that the author says he could not find any information linking the sale to the memo. He says "The white House won't say." Then in the next sentence the author states "If GW traded on exclusive non public insider information etc. " You will note he said "if"; not that GW did; in that sentence. Nobody knows if Harken energy got ahold of that memo, or if that was GW's main reason for selling his stock. How could the SEC build a case of "deception on that? Once again, if you don't report a trade to the SEC, it is not a breach of section 10b, Securities exchange act, unless there is deception involved. The Sec had no proof of deception; so how could it prosecute?
Here is an excerpt from the SEC records.
http://www.sec.gov/news/extra/sdiscfaq.htm
Clarification of Scope of Insider Trading Prohibitions
The proposals also address two unsettled issues in insider trading law:
"Use/possession" issue: Under current law, courts have split on the issue whether insider trading liability requires trading while in "knowing possession" of material nonpublic information, or proof that the trader "used" the information in trading. To clarify and strengthen the law, the Commission is proposing a new rule to address this issue. This proposed rule states the general principal that insider trading liability arises when a person trades while "aware" of material nonpublic information, but it also provides several exceptions to liability. In these situations, where a trade resulted from a pre-existing plan, contract, or instruction that was made in good faith, it will be clear that the person did not use the inside information. We believe that this approach will provide greater clarity and certainty than exists under current law<<<<<<
You will note that the courts do not know exactly what insider trading is. But there are exceptions to it as noted in the above paragraph. You will also note that GW said he sold his share because he was going to buy a house. Since that trade resulted from a pre-existing plan, it is not illegal to use inside information. You will also note that the author in your article states that someone in the business stated that GW reason for selling the stock was to" buy a house". You will also note that the author doesn't challenge that claim. The above paragraph shows that your author doesn't know what he is talking about. Under some circumstances it isn't illegal to trade share even with inside information. Any law which has a exception where a trade resulted from a pre-existing plan, contract, or instruction that was made in good faith, it will be clear that the person did not use the inside information. : is a law which has a hole big enough to drive a semi through. |
