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Gold/Mining/Energy : Crystallex (KRY) -- Ignore unavailable to you. Want to Upgrade?

To: tanoose who wrote (7278)	3/21/1998 12:28:00 PM
From: Wayne Martin	Read Replies (1) \| Respond to of 10836

Frank, That explanation makes total sense. They hit us in our soft underbellies. But unfortunately for them, it wasn't a fatal blow. Is all fair in war? Wayne Martin

To: tanoose who wrote (7278)	3/21/1998 2:59:00 PM
From: Moot	Read Replies (5) \| Respond to of 10836

Insider Trading Insignificant? Frank: I agree that the volume of shares traded recently by insiders after the exercise of options is insignificant, particularly in light of the total volume of shares traded on the market in the same period. As for Asensio's recent 'revelation' regarding insider trading, it's hardly a bomb-shell. Insider trading reports are publicly and freely available--it doesn't take much in the way of investigative work to access them. Nonetheless, I think the insider trading, in general, and the number of shares held by insiders, in particular, is of some significance. I find it disconcerting, to say the least, that so many insiders have disposed of their shares and hold only options. Moreover, I am troubled by the fact that there have been so many opinions presented that seem to make light of this and that many of the rationalizations offered are so feeble. Insider trading is a reality of the market and it is an important fact that should be taken into account. Insider trading reports and the regulations governing the reporting of these transactions are not irrelevant. This is deemed information important to investors and to which they rightfully have access. Crystallex insiders aren't engaged in anything illegal when they engage in these transactions and meet the statutory obligations with respect to reporting them. But illegal insider trading is very hard to prove, something investors should keep in mind when reviewing insider trading reports. I have seen it suggested recently that the insiders of banks and other large corporations frequently exercise options without comment. This is certainly true. If the inference is that there should be little reason to question the same activity by Crystallex insiders, however, I think a category mistake has been made. Crystallex is not a bank or a similar large corporation. Moreover, if a bank was involved in litigation wherein the bulk of the assets figured into the valuation of its share price was at stake, I think more than a few eye-brows would be raised if many of its insiders had disposed of all their shares and were exercising options and selling off more. I have also seen what might best be described as a positive ad hominen argument advanced recently in support of Crystallex's management. Briefly, the argument runs that these are people of wealth, influence, and prestige. The inference suggested is that they would not engage in illegal or unethical activity. (As I have already pointed out, any supposed illegality would be very difficult to prove.) This argument is not sound and does not even fit with experience. Some of the most astonishingly illegal and unethical acts are committed every day by people who could be described in these terms. Canadians might readily recall the companion of heads of state, wealthy, former member of the Order of Canada (and the only former member), former head of the NHL Players' Association, Hockey Hall of Fame member, player's agent, and respected lawyer Alan Eagleson. I am not suggesting that any Crystallex insiders are cut from the same cloth as Eagleson. I am just pointing out that access to wealth, power, and prestige are not necessarily indicators of integrity. Some time ago, I saw an even more feeble rationalization circulated by Eric Charters. Among the claims made by Eric was that Oppenheimer held over a million shares and options. If the conjunction is read in the sense of 'total', Eric's claim was not inaccurate. However, at the time Eric made the claim Oppenheimer held no shares and over a million options. Eric then went on to advance some specious argument to the effect that insiders, cognizant of an early 1960's legal decision with respect to Texasgulf (Kidd Creek), were selling their shares so they wouldn't be seen to be reaping windfall profits from the pending favourable resolution of the Crystallex/Placer Dome dispute. (I'm working from memory, but believe I have presented the essence of his rationalization.) Perhaps I may have been more moved by Eric's suggestion if he had offered a few examples of other small resource companies where insiders had knowingly disposed of their shares prior to a major price appreciation in order to avoid reaping such benefits. It certainly hasn't been my experience. I think the majority of Crystallex shareholders are quite aware of the insider trading. In fact, I was surprised to see someone recently ask on Stockhouse if Asensio's claims regarding the latest exercise of options was true. It seems that most shareholders (at least those who express their views on the internet) are more comfortable with this activity than I am. Regards.