The Banking and Strategy Initiative

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Insider trading in the US Markets: Understanding Gray areas, civil suits and voluntary resignations

New York - "GREED STREET or Wall Street.....

Image by David Paul Ohmer via Flickr

Move over you brash upstarts and criminal bent of mind honed young twenty somethings sharing private critical insider information. the gentlemen who knows right from wrong is here. Yes, David Sokol is so sure and upright about it he is buying 3 million shares of a company prior to recommending a corporate transaction and announcing it in the public domain. Alas, the citizens and investors at large ( Sorry, Mr Buffet) even those in India and Asia, know more about conflict of interest as they read the news. and there lies the answer. The reward in a Corporate Finance / Strategy decision making and paarticipation is very much in sharing the profits of the deal, but unbridled compensation or benefitting from the knowledge of the deal without sharing it ( And MR Sokol, this happened here) is not part of that expert network or that board room decision. I do not believe it is unfair either.

BTW, at this point it would be clear also that the other persons clear about the incorrectness and illegality of the trades are thus the Rajarathnams who play it as the criminal game it is to them I do not think Mr Bharara was very clear either on where insider trading begins before this, but this is definitely a master example of benefitting materially from that about to be public material information

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This entry was posted on March 31, 2011 by in Financial Markets and tagged , , , .


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