<p>BB, Raj is in a hedge fund, he trades in and out of stocks quickly to lock in gains. In these instances where he’s been found guilty, the holding period of a stock within his hedge fund may be a few minutes or a few days,most often not long enough to cause the damage you describe.
I do agree that others (especially other investment firms and hedge funds) who did not have access to his tips, could have lost money when he cleared his positions.</p>
<p>I’ve seen stock manipulations, but they were by the company’s own officials who “cooked” the books.</p>
<p>Boy there are some nasty responses on this thread.</p>
<p>If I remembering correctly, Pickens’ son was convicted of securities fraud, something to do with micro-cap stocks. As well, his son served no prison time but got something like 5 years probation and had to pay restitution, which his father paid. Maybe, therein lies the confusion.</p>
<p>I like T. Boone Pickens sense of philanthropy; like Buffet he is committed to giving away a large portion of his fortune. Not crazy about his politics, though, but he is a major philanthropist (I guess Milliken was, too), giving to a spectrum of great causes.</p>
<p>Re: the harmfulness of insider trading: If one person trades with nonpublic information, he or she gains an advantage that is impossible for the rest of the public. This is not only unfair but disruptive to a properly functioning market: if insider trading were allowed, investors would lose confidence in their disadvantaged position (in comparison to insiders) and would no longer invest. It threatens investor confidence in the market, which can potentially wreak a lot of havoc, more rampantly. Insider trading does not merely straddle the line between unethical and harmful; it has potential reverberative effects.</p>
<p>cbreeze, exactly because he was in a hedge fund, he had the ability to crush and financially decimate thinly traded stocks of small cap companies. An individual investor would not be able to do this easily because of limited funds. As individual investors, neither you nor I can do naked shorting, but hedgies can. A single day major downswing due to rapid shorting can cause an avalanche of further sell orders (stop losses, panic sells, etc.) and therefore damage a thinly traded stock stock very badly. Ever heard the term “broken stock”? I do not know what exactly his actions resulted in, but the scenario I described is a very real one.</p>
<p>I am a big Pickens fan. He is the only one with a realistic idea of how to get off foreign oil and create more domestic jobs. It is a shame the special interests have congress and the President so locked up that they cannot see the benefit of moving our large trucks to natural gas.</p>
<p>I am THRILLED that he was convicted. I really hope the judge throws the book at him. </p>
<p>Martha Stewart should have gotten worse punishment, IMO. First, she was at one time a broker. She also was a director of the NYSE at one point, I believe. She can’t say she didn’t know exactly what she was doing if she traded on inside info. </p>
<p>But she actually wasn’t ccnvicted of stock fraud. She was convicted of perjury and may also have been convicted of obstruction of justice. She not only lied to the FBI, she leaned hard on her RR’s sales assistant to perjure himself to protect her. She basically told one of the “little people” that she would destroy him if he told the truth. In the beginning, he lied as directed. Then he flipped. He ended up with a misdemeanor conviction, rather than a felony. Still, a young man in his mid 20s ended up with a conviction which will stop him from working in the securities industry for the rest of his life because he caved to Stewart’s demands and lied to protect HER because he knew he would lose his job if the told the truth. I’m supposed to feel sorry for Martha Stewart? Hey, I might feel a tad sorry if she “only” traded on inside info–although I suspect that if she did it that time, she did it hundreds of other times too. However, knowing what she did to a kid in his 20s and the fact that she lied through her teeth rather than plead the
5th makes me wholly unsympathetic. </p>
<p>Seriously, how many of you would want your own kids, a few years out of college, to be told by someone rich and powerful that you either lie to law enforcement to protect him/her or you get fired with a reference that insures you’re going to have a heck of a time finding another job? That is what Martha Steward did. </p>
<p>There are some who suspect that it wasn’t coincidence that Ms. Stewart’s RR was amazingly successful. He had a lot of corporate CEOs and other high ups as clients. There is speculation that this isn’t the only time one of his clients traded on inside information about a company whose CEO was also his client. Can I prove that? NO. That’s why I said speculation. </p>
<p>This happens all the time. It’s disgusting. It’s disgusting not only because most of the time it’s super rich people who get greedy and cheat, but also because 9 times out of 10 they get “small fry” to do things that are illegal or get fired. Remember Raj isn’t the only person involved in this mess. There were lots of indictments.</p>
<p>You not only want to stop the Raj’s of the world from manipulating the markets–and remember, the big losers are usually pension funds and mutual funds–you want the people who work for all these companies to think it’s better to quit than take a chance I’ll end up with a criminal record because I did what I was told to do.</p>
<p>You would think that Raj could hire the best lawyer in the world to represent him. I have to wonder. CNBC tried to interview his lawyer and the lawyer give them the finger.</p>