Exclusive: U.S. authorities probe SAC for Weight Watchers - sources

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Reuters1945 wrote:

About the time I was starting out in business, ages and ages ago, in my youth, I did some design consulting work for a corporation for which I was owed more than 15,000 US dollars, a considerable amount almost 50 years ago and it was a sum that had been well earned.

For some time they dragged their feet on paying me but assured me I would receive a check “soon”. I got into the habit of checking their Stock price on a daily basis and the trading activity was always on the light sight. No major blocks ever changed hands.

Then one day I noticed that over a million shares had been sold, an amount that made the normal number of daily shares traded for this particular stock, pale by comparison.

Two days later it was announced in the papers that due to major cash flow problems, that the company would be seeking to go into Chapter 11.

Within hours the company’s stock plummeted to half its value and it continued falling in succeeding weeks.

Eventually, like all the Creditors during the subsequent Chapter 11 process I was forced to settle for ten cents on the dollar against what I had been owed.

But I never forgot how either the President and/or people in his immediate circle, et al, had all bailed out, cashed out, just two days before news of the pending collapse hit the news.

That was my first real experience with the fact that human nature being what it is, when people have inside information, about anything, it is hard to resist the temptation to use that information.

We, “the little people”, on the outside, not privy to the machinations that go on at the top of the proverbial pyramids of the corporate world, invest our hard earned (often life) savings into the Stock Market and are always annoyed and/or shocked when revelations of insider trading activity are made public, which is often.

But how much insider trading activity is never discovered at all, ever, and just flies under the radar.

With so many millions of transactions and billions of emails and faxes flying here, there and everywhere, there is really no way, anyone, whether the government and/or private observers can reasonably ever know everything that is happening on any one trading day.

And once again, human nature, being what it is, the temptation for people to rationalize their actions, the well known ability of people to decide that something/anything, is really a “grey area” and that they are not “essentially” breaking any Laws, invites the phenomenon of insider trading to occur more often than anyone would ever wish to believe is possible.

“Uncle Charlie” cannot resist the temptation to suggest to his brother’s new Son in Law, that maybe it would be a “good idea” to take a look at “XYZ” Tool Corporation.

They say only one eighth of a glacier’s total ice mass is ever visible above the water line. And seven eighth of that glacier’s immense mass is totally hidden from view at all times. Remember the Titanic which was proclaimed Unsinkable- at least until it sank.

There is no realistic reason to believe that the amount of “insider trading” shenanigans and misbehavior, that come to light and ever get exposed to the long arm of the Law via Securities Investigations, are the whole story.

That famous film “Wall Street” got it right. There will always be those people who honestly in their gut believe that “greed is good”- if not for humanity in general, then at least for themselves.

Considering a new hot stock pick ? Caveat Emptor.

Dec 07, 2012 9:38pm EST  --  Report as abuse
tatman wrote:

1945: i had a very similar experience back in 2002 with a publishing company. inside, they knew what was happening and continued to utilize my services on a major assignment that was to hit the shelves for the christmas season. after working tirelessly for 3 months dedicated exclusively to this company, the paycheck never came. i had just purchased a home a few months prior, and found that christmas to be one of the bleakest in my life, struggling to keep everything i had invested in as the company pocketed their money, then filed for bankruptcy. months later, i received $150 for over $10,000 in contracting labor.

the suspicious thing with SAC here is that they are pulling in 25% profitability above and beyond anyone else in the industry. that alone screams INVESTIGATION and IMPROPRIETY. you are 100% correct on human nature — and i believe there is most likely a LOT of investigating due to this company. let’s just hope the overseers have the cajones to uncover the truth and hold those accountable, and do not bow to the darker side of human nature themselves…

Dec 09, 2012 11:55am EST  --  Report as abuse
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