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1996-06-04 - Re: Saw this on CNN: Anonymous Stock tips over IRC as bad???

Header Data

From: “Perry E. Metzger” <perry@piermont.com>
To: Black Unicorn <unicorn@schloss.li>
Message Hash: 5dc1934e848265d9f153df77e5e7a9833afbff578912e1dfe6759fcded57f7ea
Message ID: <199606031918.PAA05670@jekyll.piermont.com>
Reply To: <Pine.SUN.3.91.960603150424.8479C-100000@polaris>
UTC Datetime: 1996-06-04 01:08:54 UTC
Raw Date: Tue, 4 Jun 1996 09:08:54 +0800

Raw message

From: "Perry E. Metzger" <perry@piermont.com>
Date: Tue, 4 Jun 1996 09:08:54 +0800
To: Black Unicorn <unicorn@schloss.li>
Subject: Re: Saw this on CNN: Anonymous Stock tips over IRC as bad???
In-Reply-To: <Pine.SUN.3.91.960603150424.8479C-100000@polaris>
Message-ID: <199606031918.PAA05670@jekyll.piermont.com>
MIME-Version: 1.0
Content-Type: text/plain



Black Unicorn writes:
> Incorrect.
> The deciding factor is the court's determiniation of whether the 
> information was "material non-public information."  As the question of 
> materiality is vague, subjective and subject to whim, even a low level 
> employee is risking time and fines.  Often materiality has exactly zero 
> to do with what effect it may have on stock price.

Mr. Unicorn has it exactly right.

> There is a simple solution to avoiding liability.  Don't trade in your 
> own company's stock.

In reality, of course, you are fairly safe so long as no one is
looking for your head and you aren't trading based on company
secrets. However, in theory, its possible to prosecute almost anyone.

> Such restrictions have existed for decades.  Why are you so stunned?

I guess this is all obvious to wall streeters like me, who live day to
day with yellow xeroxed sheets being mass distributed to all employees
informing us of the names of 150 companies that the firm has had
peripheral dealings with recently that we aren't allowed to trade for
some indeterminate period of time. People who don't live in regulatory
paranoia land often just don't get that the SEC's regulatory authority
is broad, based on very vague statutes, and capriciously
applied. Thats reality, folks. I suppose since most people have never
experienced it they don't understand what it's like....

Perry

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