All it takes is a little patience. F. Scott Yeager, a former Enron executive, got some good news from the 5th Circuit Court of Appeals in New Orleans, which ruled that it wouldn't revisit his case. So, he no longer has criminal charges related to financial fraud hanging over him. Yeager has been acquitted on all counts. This follows a June ruling by the Supreme Court, which tossed a previous 5th Circuit Court ruling that could have resulted in a new trial.

The ruling said, "Today, ... it is clear under our initial ... analysis the jury made a finding in acquitting Yeager that precludes prosecution on insider trading and money laundering." Samuel Buffone, who was one of Yeager's attorneys, stated that his client shouldn't have been indicted to begin with and didn't do anything wrong. It has taken them seven years to get to this point.

Yeager landed in hot water because he sold stock in Enron for more than $54 million before it began the plunge that would ultimately end with its bankruptcy in 2001. He faced 125 counts, was acquitted of five (four for wire fraud and one for conspiracy to commit wire and securities fraud) and wound up with a hung jury for the remaining 120, which included insider trading and money laundering. He was later indicted again on 13 counts of insider trading and money laundering.

Continue reading Former Enron exec set free

Former Enron exec set free originally appeared on BloggingStocks on Wed, 21 Oct 2009 16:40:00 EST. Please see our terms for use of feeds.

Continue reading Who profited from Bear Stearns' collapse? One insider did, and got away with it

Who profited from Bear Stearns' collapse? One insider did, and got away with it originally appeared on BloggingStocks on Tue, 20 Oct 2009 14:00:00 EST. Please see our terms for use of feeds.

Continue reading Insiders dump stock at a furious clip -- what does it mean?

Insiders dump stock at a furious clip -- what does it mean? originally appeared on BloggingStocks on Mon, 14 Sep 2009 11:00:00 EST. Please see our terms for use of feeds.

Continue reading American Apparel CEO buys company stock

American Apparel CEO buys company stock originally appeared on BloggingStocks on Wed, 25 Mar 2009 11:00:00 EST. Please see our terms for use of feeds.

Continue reading Would you buy something because Ken Lewis did?

Would you buy something because Ken Lewis did? originally appeared on BloggingStocks on Fri, 06 Feb 2009 11:11:00 EST. Please see our terms for use of feeds.

Bank of America scoops up stock on open market originally appeared on BloggingStocks on Thu, 22 Jan 2009 08:05:00 EST. Please see our terms for use of feeds.

Say it ain't so, Mark Cuban.

Yesterday the Securities and Exchange Commission (SEC) charged the billionaire with insider trading. The regulatory agency claims that Cuban sold shares of mamma.com, a Canada-based Internet search company, with the advance knowledge of a yet-to-be-disclosed private equity offering of company shares.

Cuban allegedly sold his shares under the assumption that the private offering would greatly dilute his holdings. Selling as he did prevented the loss of some $750,000, the SEC claims in its charges.

He denies the charges and vows to fight.

Mamma.com changed its name to Copernic Inc. (NASDAQ: CNIC) in 2007. As a result of the highly publicized charges against Cuban, I expected to see trading volume in CNIC increase from its current average volume of 45,000 shares.

Sure enough, volume yesterday was at more than 350,000 shares. The lemmings are so predictable. They see something on the news and they place a trade.

No matter that the reasons for the company being in the news have little to do with the business, its current state or its future potential. The company is in the news because of insider trading, period.

Now, is that a reason for a stock to go up in value?

Continue reading Oh, Mamma Mia Dot Com -- Copernic (CNIC) shares move on Cuban story

Oh, Mamma Mia Dot Com -- Copernic (CNIC) shares move on Cuban story originally appeared on BloggingStocks on Tue, 18 Nov 2008 12:27:00 EST. Please see our terms for use of feeds.

Mark Cuban charged with insider trading originally appeared on BloggingStocks on Mon, 17 Nov 2008 11:50:00 EST. Please see our terms for use of feeds.

Lear CEO buys some stock originally appeared on BloggingStocks on Wed, 12 Nov 2008 17:45:00 EST. Please see our terms for use of feeds.

Continue reading Oracle (ORCL) president sells 500k shares

Oracle (ORCL) president sells 500k shares originally appeared on BloggingStocks on Wed, 01 Oct 2008 13:45:00 EST. Please see our terms for use of feeds.

Continue reading Is Steve Jobs' doctor an insider?

Is Steve Jobs' doctor an insider? originally appeared on BloggingStocks on Fri, 25 Jul 2008 15:32:00 EST. Please see our terms for use of feeds.

South Carolina mayor settles insider trading charges -- he still has a job? originally appeared on BloggingStocks on Thu, 17 Jul 2008 15:20:00 EST. Please see our terms for use of feeds.

Insider selling on Abercrombie & Fitch (ANF) a warning sign for bulls originally appeared on BloggingStocks on Mon, 02 Jun 2008 13:28:00 EST. Please see our terms for use of feeds.

• You might look to insider trades as an indicator of the executives' broad sentiment about the industry or company. But remember: they're not allowed to make trades when they're in possession of material non-public information (unless the trades were prearranged). So if you're buying stock because you think the CEO has some secret knowledge motivating his trades, remember this: you are buying stock because you think the CEO is a crook.
• As insider sentiment has become more carefully tracked by a variety of services, savvy executives and directors use it as a red herring to try to prop up sagging stock prices. If you see the CEO and the entire board of directors purchase a negligible amount of stock in a short period of time, it's pretty clear what happened. "John, our stock's in trouble, and shareholders are going to start complaining about how we paid ourselves $800 million while the stock went from $30 to 6 cents." "You're right, Kathy. Let's all take one day's worth of salary and buy a few thousand shares. That way people will realize that we're committed to the company and, while we're flooding the EDGAR database with Form 4s, we can also slip in the 8-K disclosing that we're being sued because our tricycles cause herpes."

Should you buy a stock based on the insider trading? originally appeared on BloggingStocks on Mon, 19 May 2008 14:50:00 EST. Please see our terms for use of feeds.

Mr. Lubell sold these shares for two purposes: first, to fulfill an obligation due under the marital dissolution agreement with his former wife; and second, to continue his financial, estate and tax planning.

True Religion chief sells $60+ million worth of stock -- why? originally appeared on BloggingStocks on Wed, 14 May 2008 10:45:00 EST. Please see our terms for use of feeds.

Beware the token insider buying at Apollo Group originally appeared on BloggingStocks on Thu, 03 Apr 2008 17:07:00 EST. Please see our terms for use of feeds.

Last week Bank of America (NYSE: BAC) bought Countrywide Financial (NYSE: CFC). The deal benefits Bank of America in that it gets a big chunk of the US mortgage market and a nice tax write-off, while Countrywide gets saved from a deep mortgage mess and pending liquidity crisis.

What is interesting to options traders though is the option activity that happened in the days before the deal. The deal was widely reported on Friday 1/11/08. But the stock options tell a slightly different story. It appears as if there are some who got wind of this deal a little early.

Call options allow an investor to take on a levered position in the stock and make huge gains if the stock appreciates. In the days before the buyout the call options were extremely active and this is typical of insider trading on the news. If you look at the number of options trading on the day before the announcement and the number that were trading several days earlier, it is very apparent that some traders had wind that something was up. On 1/10/08, the day before the announcement 195,000 January call contracts traded hands. If you compare that to the volume of three days earlier there were only 13,000 January calls traded. That is a 14 fold increase in the daily number of January contracts trading.

Kevin Kersten is an Options Analyst with InvestorsObserver.com. Disclosure note: Mr. Kersten owns and/or controls a diversified portfolio of long and short positions that may include holdings in companies he writes about. Mr Kersten does not own or control BAC or CFC positions at the time of this writing.

Countrywide options active before BAC buyout originally appeared on BloggingStocks on Tue, 15 Jan 2008 11:44:00 EST. Please see our terms for use of feeds.

Today's Wall Street Journal has reports of two possible cases of serious ethical lapses [subscription required] at some of Wall Street's most revered institutions.

First, a study has shown an interesting pattern: the investment arms of investment banking institutions buying large stakes in companies shortly before a deal is announced involving the same company -- with the investment banking arm of the institution having worked on the deal.

There's nothing inherently illegal or unethical about that, as long as it's a coincidence. But if money managers at the institution were tipped off about the deal, it's a serious crime. The Journal on one study that examined deals and 13-Fs filed by institutions, and found that 19.5% of the time, large investment banks serving as lead advisers accumulated large stakes before a deal was announced. That's about twice as often as banks not involved with the deal accumulated shares.

Some question the study's methodology, but it's been enough to pique the interest of FINRA.

Meanwhile, the SEC is investigating (subscription required) whether several current and former employees at Merrill Lynch (NYSE: MER) engaged in the front-running of client trades: receiving an order and then buying shares for a house account before filling the order, profiting from the run-up caused by a buy from a larger institutional client.

It's more bad news for Merrill Lynch, which has been rocked by subprime write-downs and regulatory inquiries into its accounting. It could also be indicative of internal controls problems at the company.

Top banks probed for possible insider trading and front-running originally appeared on BloggingStocks on Mon, 14 Jan 2008 09:46:00 EST. Please see our terms for use of feeds.

A 28-year old Harvard grad and former Goldman Sachs (NYSE: GS) associate Eugene Plotkin has been sentenced to 4 years and 9 months in prison as part of a plea agreement related to his involvement in an insider trading ring.

According to the New York Times, the scheme consisted of "Mr. Plotkin, a fixed-income associate at Goldman, and a former co-worker, David Pajcin. Their plans involved a former Merrill Lynch analyst, a New Jersey postal worker who served on a grand jury, two workers at a magazine printing press and an exotic dancer."

Why the exotic dancer you ask? I think it was smart planning on Mr. Plotkin's part. It should add a few thousand to the advance he will receive for his tell-all book when he gets out of Club Fed. And, if she had a sexy accent, it could even land him a movie deal! He even has a background in film-making.

Point is: If you're going to be a crook, always be planning your post-prison career. Congratulations to Mr. Plotkin in that regard. The crimes involved trading in advance of the announcement of mergers and hiring associates to work at a BusinessWeek printing press, gaining access to stories before they hit newstands.

Former Goldman Sachs associate gets nearly 5 years for insider trading originally appeared on BloggingStocks on Fri, 04 Jan 2008 10:40:00 EST. Please see our terms for use of feeds.

Continue reading Insiders stock up on retail stocks -- the ultimate clearance?

Insiders stock up on retail stocks -- the ultimate clearance? originally appeared on BloggingStocks on Tue, 18 Dec 2007 13:45:00 EST. Please see our terms for use of feeds.