You're absolutely right, Tom, I (do not and) did not have any bgackgound in securities when I started to work with GIFS. In fact I didn't even know what a SAC was, and I am still not sure of its' place in today's electronic society. I only had a good sense of what is right and what is wrong to guide me--these are sometimes known as values and ethics.
I remember thinking how wrong it was for some people to receive advance notice of press releases. Sure, we put a warning not to publish it or disclose the press releases--before it was officially released-- when we sent it to people like Mark Ruthiser (the SAC leader at that time). But I also remember thinking that human nature would be for him to act on the information in the press release, upon receipt. If you knew that a certain rock singer was going to die tomorrow (and given such always increases a celebrity's popularity) then you might be inclined to go out and buy up all his records!
I could not understand what role a SAC would play in today's society. We had a corporate web site supposedly for disseminating information; we had the news wires for diseminating information. All that was seemingly left was for the SAC leaders to do was to hype the stock to its members.
I had a real problem with Michael Rehtorik leaking information to his chosen few. But he told me that was the way it was done. It was as if because he had "a background in securities" he was superior to those of us (me, especially) who did not--so do not question it! It was kind of like the arrogant mentality some physicians use to intimidate a patient so that the patient will not ask questions rightfully due them: "I am the physician, you do not know enough to ask an intelligent question, so take this prescription and get it filled and come back to see me in 2 weeks." Again, I only had a sense of what was right and what was wrong--and no background in securities to base my feelings upon. I honestly resented Rehtorik's catering to Rutheiser, Essary, and Silverman.
As I mentioned before, we had shareholders who would send emails asking valid questions. I would take these for days to Rehtorik for a reply which would never come. Then, the next thing I knew, Silverman or one of the others would publish the answer on the SI. This seemed very unfair. It gave them clout, I felt, and it made them appear to be more than they actually were, i.e. Mr. Smart Investor; it made them appear to always know "something" so other investors would run out and buy more. It's not unlike the hype we get when the state lottery gets in the millions, here. It was purely a play upon both human emotions and greed.
I understand the concept of a SAC to obtain and dispense information to its members in the days before the internet or email. But with a corporate website, a person set up with a staff to answer investors questions (Rehtorik), etc., the practice of dispensing information to a SAC leader seemed to me to be purely a tool for manipulation. And I think this will be proven.
Ken Todd
BTW, I can now see a much more logical function for a SAC; to unify the shareholders in order to achieve a class action suit! |
