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Non-Tech : Auric Goldfinger's Short List -- Ignore unavailable to you. Want to Upgrade?

To: Wayners who wrote (8191)	8/30/2001 11:34:16 AM
From: LPS5	Read Replies (1) \| Respond to of 19428

Hey Wayne. With regard to channel checks, I think there are probably folks out there who undertake that sort of thing. As for whether doing so is legit, I'd personally steer far clear of it. I think the last phrase I'd use to describe such a practice would be "[o]bviously A-Okay." As insider trading laws have touched the activities (and lives) of printers, garbage handlers, attorneys, and other folks whose livelihoods are distant from the securities industry...but who by virtue of their positions or the information they come across become de facto insiders, it seems perilous. In addition, I believe the two insider trading buzzwords - material (to describe the information, which it certainly would be) and nonpublic - seem to fit the type of information a supplier might have, especially where it specifically applies to a publicly traded, inventory-sensitive client, quite well. I'm also sure that many companies have confidentiality agreements in place to guard against just that type of snooping. And, where they don't - and where there is jurisdiction - though I'm not an attorney, I'd bet that Uniform Commerical Codes (UCC) apply, making the passage of this sort of information potentially actionable vs. the distributor/supplier as having violated an implied contract contemplated by the existence of a purchaser-seller relationship, and also vs. the information seeker as having tortiously interfered in a contract. LP.

To: Wayners who wrote (8191)	8/30/2001 12:24:06 PM
From: LPS5	Read Replies (2) \| Respond to of 19428

New Insider Trading Rules The prohibitions against insider trading play an essential rule in maintaining the fairness, health, and integrity of our markets. Insider trading law has developed on a case-by-case basis under existing provisions of the federal securities laws. From time to time there have been issues on which various courts have disagreed. The Commission will consider adopting new Rules 10b5-1 and 10b5-2 to resolve two such issues. In all other respects, the law of insider trading remains unchanged. "Use/Possession" Issue Courts have split on whether insider trading liability requires trading while in "knowing possession" of material nonpublic information, or proof that the trader "used" the information in trading. New Rule 10b5-1 provides that, for purposes of insider trading, a person trades on the basis of material nonpublic information if a trader is "aware" of the material nonpublic information when making the purchase or sale. The rule also sets forth several affirmative defenses or exceptions to liability, which have been modified in response to comments. These exceptions permit persons to trade in certain specified circumstances where it is clear that the information they are aware of is not a factor in the decision to trade, such as pursuant to a pre-existing plan, contract, or instruction that was made in good faith. Clarifying Duties of Trust or Confidence in Misappropriation Cases The misappropriation theory of insider trading, upheld by the Supreme Court in the O'Hagan case, provides that a person commits insider trading by misappropriating and trading on inside information in breach of a duty of trust or confidence. The theory's application is most clear in cases involving misappropriation of confidential information in breach of an established business relationship, such as lawyer-client or employer-employee. The Commission is considering adoption of new Rule 10b5-2 to clarify how the theory applies to certain non-business relationships. Under the new rule, a person receiving confidential information under the following circumstances would owe a duty of trust or confidence, and thus could be liable under the misappropriation theory when: The person agreed to keep information confidential; The persons involved in the communication had a history, pattern, or practice of sharing confidences that resulted in a reasonable expectation of confidentiality; or The person who provided the information was a spouse, parent, child, or sibling of the person who received the information, unless it were shown affirmatively, based on the facts and circumstances of that family relationship, that there was no reasonable expectation of confidentiality. The new rules will take effect 60 days after publication in the Federal Register. sec.gov