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Strategies & Market Trends : Value Investing
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To: sportsman who wrote (31550)7/20/2008 3:08:45 PM
From: Paul Senior  Read Replies (2) of 78763
 
I hadn't seen that about Semgroup. It is very bad.

The parent's problems of possible bankruptcy apparently caught both my lp funds unaware. Kayne Anderson being the #2 institutional holder and Cushing being the #2 mutual fund holder, according to Yahoo. Then you have top firms like Neuberger holding #1 position; Tortoise and Cohen & Steers in there too. Insider buys - there have been many - up through May and no insider sales. So there's been no foretelling of the quick demise of the company or parent.

Now media reports that the structure of these things and loan commitments to banks are such that banks or others get special status reports on the business that aren't made public. Which now lead to suggestions by the media that there's insider trading on adverse news on this stock. The implication being as well there's the possibility there could be insider trading in future or now on other stocks that have such "secret" reporting requirements.

That presumably prudent investors or professional investors like those mentioned above could be blindsided is very bad. Worse, when next time we - when I - see stocks drop precipitously like Semgroup - instead of allowing that it's panic and me wanting to re-look at the numbers, public reports, media comments, or just hold on -- now I've got to consider the very good possibility that the drop is all valid - supported by banking people or other insiders trading on the additional secret knowledge they have. Something I wouldn't have expected before Semgroup - (rapid stock descent, possible bk) - from stocks operating in the lp arena.
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