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Strategies & Market Trends : Anthony @ Equity Investigations, Dear Anthony, -- Ignore unavailable to you. Want to Upgrade?

To: Pluvia who wrote (90056)	1/26/2005 9:46:19 AM
From: Pluvia	Read Replies (1) \| Respond to of 122087

also: Message 20975785 the government argues that its instruction as to when information becomes “public” must be adopted because it is “true to the law in this Circuit,” citing SEC v. Mayhew, 121 F.3d 44, 50 (2d Cir. 1997). Gov’t. Let. at 1-2. However, in Mayhew, the court noted that information becomes public when disclosed “to achieve a broad dissemination to the investing public generally and without favoring any special person or group...or when, although known by only a few persons, their trading on it has caused the information to be fully impounded into the price of the stock.” Id. at 50 (emphasis added). Although Mayhew made clear two separate bases on which information can become public, the government’s proposed charge conflates them as one. It provides, for instance, that “[w]hen an investor with such information chooses to disclose it, the non-public information remains nonpublic for purposes of the insider trading laws until it has been effectively disseminated in a manner sufficient to insure its availability to the investing public and to insure that the market has had an opportunity to ‘absorb’ the disclosed information.” (emphasis added). Under the government’s understanding of insider trading, Mr. Elgindy would be guilty of the offense even if he traded on publicly available information, so long as it had yet been incorporated into the price of a stock. Among other things, this language would render virtually any trader who promptly acted on information provided on the Bloomberg service guilty of insider trading.

To: Pluvia who wrote (90056)	1/26/2005 11:44:25 AM
From: rrufff	Read Replies (1) \| Respond to of 122087

try looking again I did. As I've suggested to you in my prior posts, you are taking relatively small portions out of a very much larger picture. First of all, you cited the defendant's letter objecting to the instructions. Presumably, there is a similar memo from the government, which argues in opposition. This was all argued before the court and the result is what the actual instructions were. Secondly, throughout my posts, I've suggested that proving manipulation in the various forms alleged in the complaint would be the most difficult because of nuances, particularly where there is a jury. Extortion was always the key here in my mind. Mining the FBI confidential information may have been a motivation but the key to conviction is extortion, a much easier concept for a jury to understand. I also suggested to you that I don't think the government would have even brought this case criminally (as opposed to SEC adm hearing) had it not been for the extortion and the fact that the FBI must have been po'd by the negative PR of someone using its data for selfish gain. Thirdly, getting back to the issue of whether there was trading on material non-public information. Even the defendant's letter refers to information that is not available elsewhere, e.g., rap sheet. Investigations and other matters are also not available. For the sake of argument, assuming that all the information was available elsewhere totally, which I don't believe was the case, then, again for the sake of argument, would the trading on that information be a violation? I agree that is an interesting question. I believe it would depend on the facts and how readily available the information is to the public. However, as I have posted before, it is an area that is evolving and we will see more appellate work in this area if the government chooses to move from this victory to other possible defendants. I could see a judge asking a jury to decide if, given the testimony, was the information materially not available to the public. On the other hand, I could see a court saying that information readily available on the internet can never be non-public. Also I could see that information such as the status of an investigation are almost never public.