The gif isn’t quite right. Martha Stewart was friends with the president of a company called Imclone. He told Martha that some bad news was coming (a new product was failing FDA approval or something). Martha (understandably) called her broker and told him to dump the stock. From what I recall the sale was about the number in the gif, but the gain (the amount she would not have lost had she don’t nothing) was about $50k.
I don’t think Martha considered what she was told was non-public information when she called her broker. When she found out that it was non-public that’s when she came up with the cover story about the stop-loss order. (This is the crime) It was complete BS. She got called on it and went to jail, lost millions in value and cred, but on the bright side learned how to knit.
What she SHOULD have done (life lesson here) was day Yes, I screwed up. I didn’t consider that my friend was telling me non-public info. I’m sorry. How about I donate that $230k to charity and double or triple that and say mea culpa. But nooooooo. She came up with a story and stuck with it and went to jail.
Bringing us to today. What will Icann say? This will be investigated by the SEC. Learning the lesson of Martha will not really help. Talking to POTUS about an unannounced steel tariff couldn’t be argued away in the same way.
Believe it or not, this might not be illegal - although I agree it optically looks illegal as shit.
A long time ago, I did securities law plus I've spent a long career on Wall St, so I'm not just making this up. Trading on 'hard to obtain' information that is legally obtained is completely legal and is not insider trading (this is the root of 'research'). Government data such as employment numbers or retail sales are specifically embargoed which mean that obtaining them early is theft, but that's not the case here.
However, a presidential advisor (or even a private citizen) trading on the basis of a conversation with the president himself...probably is okay. Trading based on conversations with members of congress happens all the time. Investment banks arrange 'policy Tours' in Washington DC monthly - I've been on dozens upon dozens of them.
I'm sure some people are going to bring up the STOCK Act from 2012. However, what people forget is that congress completely gutted it in 2013. It really has zero enforcement anymore.
BlueNotesBlues on March 4th, 2018 at 02:10 UTC »
Stewart went to jail for making false statements to federal investigators.
That said.
Icahn was probably informed of the tariff announcement beforehand and dumped the stock to avoid a loss. He's probably guilty of securities fraud.
gumout on March 4th, 2018 at 03:26 UTC »
The gif isn’t quite right. Martha Stewart was friends with the president of a company called Imclone. He told Martha that some bad news was coming (a new product was failing FDA approval or something). Martha (understandably) called her broker and told him to dump the stock. From what I recall the sale was about the number in the gif, but the gain (the amount she would not have lost had she don’t nothing) was about $50k.
I don’t think Martha considered what she was told was non-public information when she called her broker. When she found out that it was non-public that’s when she came up with the cover story about the stop-loss order. (This is the crime) It was complete BS. She got called on it and went to jail, lost millions in value and cred, but on the bright side learned how to knit.
What she SHOULD have done (life lesson here) was day Yes, I screwed up. I didn’t consider that my friend was telling me non-public info. I’m sorry. How about I donate that $230k to charity and double or triple that and say mea culpa. But nooooooo. She came up with a story and stuck with it and went to jail.
Bringing us to today. What will Icann say? This will be investigated by the SEC. Learning the lesson of Martha will not really help. Talking to POTUS about an unannounced steel tariff couldn’t be argued away in the same way.
Edit: noted the crime. Thanks Laminar_flo
Laminar_flo on March 4th, 2018 at 03:44 UTC »
Believe it or not, this might not be illegal - although I agree it optically looks illegal as shit.
A long time ago, I did securities law plus I've spent a long career on Wall St, so I'm not just making this up. Trading on 'hard to obtain' information that is legally obtained is completely legal and is not insider trading (this is the root of 'research'). Government data such as employment numbers or retail sales are specifically embargoed which mean that obtaining them early is theft, but that's not the case here.
However, a presidential advisor (or even a private citizen) trading on the basis of a conversation with the president himself...probably is okay. Trading based on conversations with members of congress happens all the time. Investment banks arrange 'policy Tours' in Washington DC monthly - I've been on dozens upon dozens of them.
I'm sure some people are going to bring up the STOCK Act from 2012. However, what people forget is that congress completely gutted it in 2013. It really has zero enforcement anymore.