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To: Kimberly Lee who wrote (4161)	1/18/1999 6:49:00 AM
From: ztect	Respond to of 5102

hey Kim, Found that article on when Inside Buying really isn't Inside Buying..... Didn't quite get the particulars correct in my prior post, but I believe I got the accurate gist of this article. Plus just for fun, I copied your post to Sharon and my rebuttal and emailed these messages to my main man Stark just to get his "opinion" on your attempts to spin, especially since you had a pretty weak disclaimer despite the lenght of your apparently thought out points of view. Well, anyway without any further adieu, here's the article from The Ny Times.... via the courtesay of "The Anti-Guru" ztect, just being a bull in a china shop of false pieties. ============================ MARKET WATCH; Insider Buying: Beyond The Spin By GRETCHEN MORGENSON Delivering its third-quarter results 10 days ago, the management of CNA Financial, a large Chicago company that sells life, property and casualty insurance, had bad news and good news. The bad: ''Extremely competitive conditions'' in its commercial property-casualty business caused a net loss of $14 million, or 9 cents a share, the company said. The good news? CNA said its top executives, who had not been big owners of its stock, had bought 1.2 million shares on Oct. 9 in a new stock ownership plan for officers. ''A higher level of ownership by senior officers strongly reinforces our focus on accountability,'' said Dennis H. Chookaszian, CNA's chairman, in a news release. CNA is controlled by the Loews Corporation. Investors bid the stock up almost 2 percent on the news. If management was willing to put its own money into the stock, surely good times were about to return. Maybe so. But the news release did not note that the buys were made with company loans, not with the insiders' own money. Each loan is secured by the stock bought with it; the borrowers pay the interest. Loan programs like CNA's are a sign of the times. Companies know how closely investors watch insiders' trades. Now their buys are becoming part of corporate spin; investors can no longer assume that an insider's big buy is an unalloyed vote of confidence. Bob Gabele, editor of Insiders' Chronicle, a newsletter in Rockville, Md., tracks executives' transactions. ''In the 1980's you could assume insiders were buying for one of two reasons,'' Mr. Gabele said. ''Either it was a new insider buying for the first time, or they were buying for direct investment.'' But loan programs make reading the tea leaves trickier. ''We sense in many more cases these days that insider purchases are being made to paint the tape and make a situation look good,'' Mr. Gabele said. CNA did report the loan program in its quarterly statement filed on Friday, and at least requires the executives to pay back the loans. Some companies forgive these loans. Loans guaranteed or financed by the company to help insiders buy shares, while still rare, are becoming more common. Mr. Gabele estimates that 5 percent of companies have them, but reckons they can account for up to 20 percent of insider buying. Companies as varied as Conseco, Equifax, Navistar, the St. Paul Companies and Cummins Engine offer them. Insider purchases are often trumpeted by companies, but the loan programs are not always as publicized. Mr. Gabele says some loans do not show up in company financial statements, though the Securities and Exchange Commission requires that loans to executives exceeding $60,000 be flagged there. Even in cases where loans are identified, details about them -- whether they will be forgiven, say -- are scarce, and often come months after an insider has bought. ''Inadequate disclosure requirements regarding programs designed to prompt insiders to buy their company's shares serve only to mislead investors who rely on insider buying for investment guidance,'' Mr. Gabele said. ''When not properly disclosed, these programs defy the spirit of the rules intended to provide the public with prompt and accurate information about the trades of U.S. corporate insiders.'' Buyers beware.