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Politics : Foreign Affairs Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: Sun Tzu who wrote (149681)	10/28/2004 4:36:14 PM
From: carranza2	Respond to of 281500

I think there is an exception to insider information liability if the buyer or seller acts on information which he is not aware is in fact "material nonpublic information." In other words, if you are a dolt and cannot recognize that the information being provided to you is insider info., you may avoid liability. The "I'm a dumb chump" defense, which I should think is very tough to establish. Sure, it is perfectly normal to want to sell a stock you know is going to fall after receiving insider information no one else has. But it's also illegal. The fact that you consider it "perfectly normal" makes no difference. The US securities markets are not a souk. The stock markets were highly unregulated in the 1920s, some tremendous frauds were perpetrated with impunity because these rules were not in effect. As a result, FDR established the SEC. It's first head was Joe Kennedy, who knew a thing or two about stock scamming.