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Gold/Mining/Energy : Let's tag and post insider trading -- Ignore unavailable to you. Want to Upgrade?

To: Lilian Debray who wrote (42)	10/26/1999 2:24:00 AM
From: marcos	Respond to of 43

Insiders should disclose trades the minute they're made By DIANE FRANCIS The Financial Post Insider trading charges laid last week against Corel Corp.'s chairman Michael Cowpland has sparked renewed controversy over such crimes. As I wrote last week, suspicious and lucrative trading on Canadian stock exchanges often occurs prior to many mergers, acquisitions or sudden turns of event in the life of public companies. Everyone knows that insider trading goes on and few get caught. This is unfortunate. But more regulators and more red tape are certainly not solutions. There's no way to completely eradicate cheating, but there is a rule change that would go a long way to mitigate such behaviour's deleterious effects on stock markets. The fact is that regulations currently do not live up to the stock market tenet of "full, fair and timely" disclosure to all shareholders. Right now, rules require "insiders" to disclose their trades within 10 days after the month in which the transaction occurs. That means the public does not know what they have done for as long as 40 days. That's a glacial reporting time frame. But players say it's necessary because right now there are insider trading forms and legal advisors involved. Such red tape was cited when I conducted a survey last year among a few big shots who had filed late without consequences. Tardiness is not unusual. But such a lag gives any cheater an enormous head start over other shareholders or the public markets if he or she has secret information that, when announced, will affect stock prices. That's not "timely" disclosure, in my opinion. Current laws are out of date, given the new reality of instant, electronic information available to ordinary investors with a flick of a switch. Timely disclosure should mean immediate disclosure. Insiders, and/or their brokers, should disclose trades the minute they make them so that everyone knows about them in a timely fashion. After all, the technology exists and so do the precedents for such "real-time" rules. All that has to happen is if an insider picks up the phone to make a trade, his broker can easily code it an insider trade with the name attached for the market to see. Other "specialized" forms of trading are earmarked such as so-called "pro" accounts involving trades done on behalf of a broker or brokerage firm. Besides that, the brokerage firm doing the trade is also noted by code number for all the market and public and regulators to see. Both inscriptions are immediate in view of the importance to the market of knowing who is trading what and for how much. For instance, "pro" accounts are important so that firms and brokers cannot get away with dumping stock they are recommending clients purchase and vice versa. The brokerage firm's participation in trading is also important for market players to know so that firms doing underwritings cannot get away with dumping stock they are recommending the public buy and vice versa. So precedents exist for immediate, real-time disclosure. Then there's the issue of disclosure of "material facts" themselves. Such information, once recognized as such, must be immediately released by a publicly listed corporation. Companies are not allowed to withhold releasing earnings, extraordinary losses or events or catastrophes until the 10th day of the month following the material fact. If it's important to immediately release material facts, which is indisputably the case, then it's equally important to immediately release insiders' trades that are telltale transactions that markets are entitled to know about. On top of all that, there's no excuse for the current disclosure delay. We live in an era when billions of dollars can be electronically transferred across multiple borders within nano-seconds. I would hope public policymakers in this country consider reforming insider trading rules. At the moment, the public is not given the information in as timely a fashion as technology will permit or fairness would dictate. canoe.ca She must have tripped across the thread -g-