From: "Perry E. Metzger" <perry@piermont.com>
Date: Tue, 4 Jun 1996 11:55:00 +0800
To: Duncan Frissell <frissell@panix.com>
Subject: Re: Saw this on CNN: Anonymous Stock tips over IRC as bad???
In-Reply-To: <2.2.32.19960603200355.0075cc58@popserver.panix.com>
Message-ID: <199606032022.QAA05790@jekyll.piermont.com>
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Duncan Frissell writes:
> Though if I trade based on my non public knowledge that the Gray
> Aliens will strike at Midnight on 31 December 1999, I am probably
> safe.

I'm not so sure. If you got access to advance information on
Department of Commerce or Agriculture reports and traded futures based
on them you'd be in sheep dip. I would suggest checking carefully
before trading that way.

On the other hand, it is not against U.S. law to trade non-US
securities, do foreign exchange transactions, etc, based on non-public
information.

> If info that is too far removed is included then any stock analysis
> system would be illegal.

Heh heh heh heh heh.

The laws are vague and are arbitrarily and capriciously
applied. Technical violations happen constantly. One of the mechanisms
of control the SEC has at its disposal is the fact that almost anyone
in the business they choose to target can probably be thrown in jail
for something or other.

> Note BTW that the Feds lost almost all of the '80s insider trading
> cases that actually went to trial.  They only won 2 or 3 that went
> through the full trial and appeals process.  That is a very poor
> record since prosecutors usually have an 80-90% success rate in
> criminal trials.

If you are talking about the trials associated with the Boesky affair,
most defendants plead guilty rather than face multiple lifetimes in
jail. A few defendants were aquitted at trial.  However, convictions
for insider trading are not particularly rare.

Perry