Depends on size of company. In large public group President, Exec VP etc are involved with neg. deal. Typically anyone above the deal maker, board and sometimes bit players from HR Accting and MIS if any analysis is involved with presenting to board, although bit players could only guess at what's going on (but they're pretty sharp). Besides them there is the supporting cast, Investment vultures, Lawyers and support personal (secretary and the like who type board resolutions).
You may recall recently some bit players got nailed on their inside infor of IBM's buy out of Lotus. Only got caught cause they got real greedy.
here's a recap on the IBM/Lotus case. I'm convinced this goes on on a lot of deals, how else do you explain unusual trading before a deal
Copyright 1999 Post-Newsweek Business Information, Inc.
Newsbytes
May 26, 1999, Wednesday
LENGTH: 595 words
HEADLINE: IBM Worker, 24 Others Charged In IBM/Lotus Insider Trading
BYLINE: Ian Stokell;Newsbytes
DATELINE: NEW YORK, NEW YORK, U.S.A.
BODY:
In what is apparently one of the largest instances of insider trading ever, certainly in terms of the number of people involved, the Securities and Exchange Commission (SEC) has charged 25 individuals stemming from IBM's [NYSE:IBM] acquisition of Lotus Development in 1995. It is the second time charges of insider trading have been levied against individuals involving the IBM/Lotus deal.
The new insider trading charges revolve around an IBM secretary named Lorraine K. Cassano who, the SEC says, was informed of the impending deal by a supervisor at work. She also learned of the deal by being asked to copy related documents some time earlier, authorities contend.
According to the SEC, when she found out the date the acquisition was to be made public, she promptly told her husband, Robert M. Cassano, who then asked two friends to buy stock for him. Nearly two dozen other people also bought stock based on the information, namely friends and family of the IBM employee's husband, over a six hour period, SEC officers say.
When the acquisition became public knowledge three days later, on June 5, 1995, Lotus stock doubled to $61 per share - evidently netting the insider traders $1.3 million.
The IBM worker has since been fired from the company, after being suspended when IBM heard of the investigation. Company rules reportedly forbid any non-public information being divulged to the public by an IBM employee.
The case was filed in the US District Court for the Southern District of New York.
The SEC wants everyone involved, all who live in either New York or New Jersey, to give back any illegally obtained profits and be fined a total that adds up to triple the amount they made in the deal.
The SEC says that the information was passed down to six tiers of traders, and that many of the defendants were infrequent or even first time securities purchasers who purchased primarily call options, which let them make large profits on relatively small investments.
The husband already pleaded guilty to insider trading on Jan. 15, 1998. Some of the others have already admitted perjury and obstruction of justice, having disguising their connection to the insider trading group and lying under oath, authorities say.
While the SEC has made its peace with four of the defendants - the Cassanos, Michael P. Green, and Dr. Gary Spierer - the case is still pending against the other 21 defendants. The four agreed to permanent injunctions from violating the antifraud prohibitions of the federal securities laws and agreed to pay "monetary relief."
The other defendants named by the SEC include: Domenico Alba, Richard Cofrancesco, Alvin Ira Davis, Lawrence DeMonte, Carmine DeSantis, Ronald DeTommaso, Isaac Lederman, Samuel Gary Lederman, P. Gerard Mazzone, Peter G. Mazzone, John J. Melville, Joseph Petrosino, James Vincent Ribellino, Jr., Jonah Rosenblatt, Diane Russo Scipioni, Ralph Serpe, Claudio Spinelli, Domenico Spinelli, Dorinda Marie Tribiano, Gerald Wells.
Each defendant was said to have made anything from $7,500 to$ 118,000 on the illegal insider trading deals.
The other instance of insider trading based around the IBM/Lotus deal involved former Chase Manhattan Bank employee Robert Scott, who was charged on April 16, 1998. He settled in the case, paying disgorgement, plus prejudgment interest and a penalty.
Reported by Newsbytes.com, newsbytes.com
16:58 CST Reposted 22:06 CST
(19990526 /WIRES NETWORK, ONLINE, BUSINESS, LEGAL/SEC/PHOTO)
LANGUAGE: ENGLISH
TYPE: NEWS
LOAD-DATE: May 27, 1999 |
