What about the SEC.
Well, there are several different parties here.
1) Lutts and Cabot Newsletter - if they used inside info, or were selling while advocating buying - or were supporting the price, either up or down. This seems to be resolved (although others may doubt) by the SEC settlement announced last week.
2) Cabot money management - If they were trading/acting on inside information - or were supporting the price, either up or down - or did not maintain adequate independence from Cabot Newsletter. Again, seemingly resolved by last weeks SEC settlement.
Which seems to validate what Cabot had said...the two parts are separate, and money management acts independently and without non-public information from Lutts pere and Newsletter. There are lots of places in the investment banking and other parts of the finance business where two parts are dealing with same company, but act differently because they know different things, which are not shared and cannot legally be shared - the 'Chinese Wall' concept.
Of course not everyone believes this happens, but it does, most of the time.
3) Presstek investors, owners, short-sellers, officers, or directors who acted on inside information or who may have supplied false or misleading information to the public. Or supported the price - either up or down, by manipulative actions. Yet to be seen what turns up.
'Insiders' (SEC definition) have only limited time frames or 'windows' in which to act when there is considered to be 'full public disclosure', generally after recent financials have been released. Of course this was recently also the point in time when the stock price was high, but that does not make it wrong, per se.
4) Presstek the company. If it knowingly submitted false or misleading information to the public. Would also impact officers and directors. For the company - consent decree, unless there were MAJOR problems...like all the financials were made up out of thin air.
One thing is for sure...Presstek will spend a LOT of money dealing with these issues - which will come out of earnings. My GUESS is $1->2 million. And 2 years to resolve.
Just because there were lawsuits filed does not mean that there were wrongs committed. However, new laws or not, I don't believe that they will be resolved quickly or cheaply, as the circumstances, I agree, are such as to provoke suspicion. And 'ambulance chaser' is not in the American vocabulary for nothing.
With respect to the Cabot dilemna - I believe that there is none. I accept that Money Management is independent of the Newsletter - and thus is no different than any other money manager holding Presstek. And again, the recent SEC settlemnt seems to suggest that this is so - except in the minds of those who believe that there is still MORE SEC investigation of Cabot going on. I don't know, and hope anyone who does KNOW would post what's happening. Of course, that might be insider information also.
The real concern is that were Cabot to change position on Presstek ALL of those who are riding Cabot's coattails, and not their own knowledge and judgement, will flood the market for a while.
Perhaps the only theory not yet advocated here is that someone created all this bad news and promulgated the lawsuits to drive the price down so that they could accumulate a bigger stake at a lower cost. Watch Tom's Presstek WWW page for the info on June 30 institutional investor holdings to see who added to holdings since March 31. Or else maybe it was...
Happy reading. Hope something here is helpful.
Bill Fuller |
