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Technology Stocks : Terayon - S CDMA player (TERN) -- Ignore unavailable to you. Want to Upgrade?

To: pat mudge who wrote (785)	4/18/2000 1:51:00 PM
From: lml	Read Replies (3) \| Respond to of 1658

Pat: You correctly describe insider trading rules. The magnitude of the transaction does not go toward the nature of the violation, but rather to the amount of damages for which the insider may be held liable. All an insider need do to violate Rule 10b-5 is to be in possession of non-public material information and trade. If the insider has inclination to trade the law imposes upon him the duty to first disclose that material information, then trade. I'm sure TERN officials will debate the materiality of the status of the S-CDMA modem and CableLabs, and hence their duty to disclose, but there is no dispute that trading by insiders took place. So the real issue to focus on here is the materiality of TERN's affairs with CableLabs with respect to possible inclusion of its S-CDMA modem technology into DOCSIS 1.2 (advanced physical layer). Unfortunately, the fact that other cable modem manufacturers might have been aware of the true status of the S-CDMA and DOCSIS 1.2, which I believe I heard Zaki relate on the callers on the CC, does little to diminish the non-public nature of the information. Such information was still proprietary and shared only among other cable modem manufacturers party to DOCSIS certification process when the TERN officials sold their securities.