Examples of insider trading

[Dan_]

Another example? A relatively dead stock waking up. No news currently, but expected to report on mine dewatering & analysis fairly soon.

 

[Dan_]

WEZ - Still inching up and appears to be building support and still no announcement. Could others possibly know more then we do? surely not?

 

[kaveman]

Not strictly true about Wez and no anns. Their current activity spells out why the chart has been rising recently.
They are currently drilling and had been since eary November when teh share prices started rising. They had forecast a report in mid january, and had also forecast a geological resource estimate in March.
What am seeing on the chart is typical buying in before the exploration programme is completed in the hope of positive outcome so can sell on fact after buying on rumour, so to speak.
This price behaviour is typical of small exploration companies

 

[Dan_]

Graham,

Thanks for the logical explanation, I've still got a lot to learn about these patterns.

 

[markrmau]

Todays AFR

Citigroup charged with inside trading
Mar 31 12:19
Feedback AFR staff

Australia's corporate regulator is taking action again Citigroup in the Federal Court, saying the investment bank acted on inside information to trade shares in ports operator Patrick Corporation just ahead of Toll Holdings' announcement last August of a takeover bid for Patrick.

The Australian Securities and Investments Commission said on Friday it had filed civil proceedings against Citigroup Global Markets Australia, accusing it of failing to adequately manage conflicts of interest, "unconscionable conduct" in relation to financial services and trading on its own account on inside information.

Citigroup acted as an adviser to the transport conglomerate Toll in its hostile $4.6 billion takeover bid for Patrick, which was first announced on Monday, August 22 last year and which is still unresolved.

ASIC says its investigation into Citigroup identified substantial proprietary trading in Patrick securities on the Friday before the announcement. The regulator is now seeking orders that the bank breached the conflicts of interest and insider trading provisions of the Corporations Act.

"This is a significant case raising two very important issues for the securities industry - having adequate arrangements for managing inside information and dealing with conflicts of interest," ASIC's deputy chairman Jeremy Cooper said in announcing the court action on Friday.


"ASIC is saying that Citigroup fell down on both fronts in relation to its role as adviser to Toll. ASIC alleges that Citigroup traded on inside information and directly against the interests of its client."

The matter, which follows joint initial enquiries with the Australian Stock Exchange, is due to go before the Federal Court on April 28.

 

[RichKid]

Todays AFR

Citigroup charged with inside trading
Mar 31 12:19
Feedback AFR staff

Australia's corporate regulator is taking action again Citigroup in the Federal Court, saying the investment bank acted on inside information to trade shares in ports operator Patrick Corporation just ahead of Toll Holdings' announcement last August of a takeover bid for Patrick.---------
----------
The matter, which follows joint initial enquiries with the Australian Stock Exchange, is due to go before the Federal Court on April 28.

Thanks for that Mark, just read a similar piece in the Herald (http://www.smh.com.au/news/Business...insider-trading/2006/03/31/1143441316836.html), it mentions a fine of $1m and some community service orders etc, but I think that's a joke. They should confiscate every cent they made on the illegal activity and fine them on top of that as well. Interesting case to follow to see how they operate, hopefully it'll be reported in the papers.

All the other instos who do the same may be laughing that Citibank got caught but let's hope they get done in as well. I've heard insider trading is hard to prove. Maybe we can track the buying from price data and anncts, as they would already have done at ASIC. This is why TA can help track insiders, unlike waiting for an annct.

Except with the SFE/ASX merger for eg, things seemed water tight, not a leak or rumour.

As an aside: it just goes to show how long it takes to get all the data and evidence together to launch a case, it was many months ago that the takeover price action started (most of us followers would remember looking at the PRK volume spikes on that weekend before the annct).

 

[RichKid]

A bit more detail about the Citibank insider trading affair: http://www.smh.com.au/news/business/how-citigroups-walls-fell-on-toll/2006/03/31/1143441339633.html

 

[RichKid]

A big noted US case, sounds like one for a movie imo: http://www.smh.com.au/news/business...-juror-arrested/2006/05/12/1146940732612.html

 

[markrmau]

While commodity stocks were obviously weak today HDR seems to stand out. I understand they have released bad news to the london market tonight.

 

[markrmau]

Michael Kiernan, MD of CSM sells 1,000,000 shares at average price of about $2.66 on 10 May.

12 trading days later, CSM released a profit warning at 3.51pm Friday afternoon. The SP dropped 5% (from $2.12 to $2.02) after the warning, but probably has much more to fall monday.

 

[wayneL]

Michael Kiernan, MD of CSM sells 1,000,000 shares at average price of about $2.66 on 10 May.

12 trading days later, CSM released a profit warning at 3.51pm Friday afternoon. The SP dropped 5% (from $2.12 to $2.02) after the warning, but probably has much more to fall monday.

Oh my! Blatant!

 

[markrmau]

Wait, it gets better.

After market on 1/6 CSM offers $70M of convertible notes through JP Morgan.

I wonder how many days it would be from when they first realised there MIGHT be a problem, through to analysing sales data and organising the convertible notes through a broker. Wouldn't be about be about 2-3 weeks would it?

 

[RichKid]

Oppy buyer: contrarian or crook?

SEC, attorney-general probe options killing

David Litterick in Chicago
May 8, 2007 SMH http://www.smh.com.au/news/business...options-killing/2007/05/07/1178390225368.html


THE US Securities and Exchange Commission has waded into Rupert Murdoch's $US5 billion bid for Dow Jones after launching an investigation into suspicious trading of Dow Jones stock.

The attorney-general of New York is also probing trading of stocks and options made ahead of last Tuesday's offer.

Spokesmen for both Dow Jones and News Corp said they had received subpoenas from the attorney-general and inquiries from the SEC. Both said they were co-operating fully.

The authorities are looking at trading in Dow Jones options from late April to last Monday - the day before news of the offer emerged. More than 10,000 call options on the stock changed hands in that period, compared with about 7000 during the entire first quarter.

Dow Jones's shares themselves traded very heavily on April 17, the day that Mr Murdoch sent a letter containing his proposed offer to the Dow Jones board, with 2.8 million changing hands. This was more than double the average daily volume, although the company also reported results that day.

The trades left some with enormous profits as shares of Dow Jones rose almost $US20 to $US56.20 on the day that news of the bid emerged.

On April 25, less than a week before the $US60-a-share offer was publicly disclosed, an investor bought an option to buy 280,000 shares of Dow Jones for $US40 each in September.

At the time the shares were worth about $US36 and had not crossed $US40 in a year. The future for newspaper companies, meanwhile, was widely considered to be grim. As a result, the options cost the investor US85c a share on the American Stock Exchange.

After Mr Murdoch's offer was announced on Tuesday, however, shares of Dow Jones shot up to $US56 and the value of the options jumped to $US17.20. The buyer of the options had a profit, on paper, of $US4.6 million.

The investor was either lucky, highly perceptive or - as many on Wall Street suspect - acting on insider information.

That profitable bet was one of severally unusually large trades in the options to buy Dow Jones in the last week.

Trading in Dow options is generally light and has rarely exceeded 100,000 options a day, let alone in one big trade.

"The chances of this being just shrewd timing are zero," said Jon Najarian, co-founder of OptionMonster.com, a site that studies unusual trading.

The investigations come as the SEC has ramped up its focus on insider trading, especially involving Wall Street professionals and merger activity.

Telegraph, London with agencies

 

[bigdog]

http://www.theaustralian.news.com.au/story/0,20867,21703082-643,00.html

Insider trading in Dow alleged
Glenda Korporaal
May 10, 2007

THE daughter and son-in-law of a prominent Hong Kong businessman have been charged with insider trading by the US Securities and Exchange Commission after buying about $US15 million ($18 million) in Dow Jones shares ahead of last week's bid by News Corporation.
The US SEC has alleged that Charlotte Wong Leung Ka-on and her husband Kan King Wong bought some 415,000 Dow Jones shares in the two weeks before News announced its $US5 billion offer.

News of the $US60 a share offer sent shares soaring.

The SEC says the share trading put the couple in a position to make an estimated $US8 million profit from trading in Dow Jones shares.

Charlotte Leung is the daughter of Hong Kong's Michael Leung, who founded Hong Kong mobile phone company China Resources Peoples Telephone.

The family sold the company to China Mobile last year, giving the Beijing-controlled company an entry into the Hong Kong mobile phone market.

It is now a major competitor against Telstra's Hong Kong mobile company CSL.

In a civil complaint filed in a New York court this week, the SEC alleges that it has "strong evidence" that improper trading occurred.

The Commission said the pair originally didn't have enough funds in their brokerage account with Merrill Lynch in Hong Kong to fund the transactions.

It said the pair spent more than a week putting the funds together, including getting some $3.2 million from Charlotte's father, Michael Leung.

They also wired another $US4 million into their Merrill Lynch account from a bank account in Brussels and also took out two margin loans to buy the stock.

The couple bought the shares between April 13 and April 30.

Dow Jones shares jumped 55 per cent on May 1 when the deal was announced.

The SEC said the purchases of Dow Jones stock increased the value of their Merrill Lynch brokerage portfolio by about 25 times.

It said the pair had no previous history of trading in the stock.

The SEC filing said the husband placed an order on May 4 to sell their Dow Jones stake, asking a broker how long it would take for the money to become available in his account.

The SEC won a temporary order freezing their account to prevent them withdrawing the proceeds of the sale.

The SEC filing does not make any allegation against Michael Leung, who has retired following the sale of his company last year for more than $US460 million.

>"This is an insider trading case involving highly profitable and highly suspicious purchases of Dow Jones shares," the SEC said in its filing.
"Defendants acquired a massive position" in Dow Jones stock.

Charlotte Leung was a director of Peoples, along with her father, until the company was sold last year.

The company, which was listed on the Hong Kong Stock Exchange in 2004, was delisted after the sale.

At the time, the company held one of the city's 3G mobile licenses.

Before the sale, the company's major shareholder was the mainland China state-owned conglomerate China Resources, which owned 48 per cent of the company.

Based in Beijing, China Resources' business includes property, retail, consumer goods, power, construction materials and manufacturing.

Hong Kong sources said yesterday that Charlotte Leung's career had included working for Citigroup.

But they said the Leung family's involvement in the mobile phone business would also have given them contacts in Hong Kong media circles.

The family was also well connected in Beijing circles.

Hong Kong sources said yesterday they were at a loss to understand why the couple had undertaken such a complex and substantial transaction in Dow Jones shares.

They said the size of the transaction would appear to indicate that the couple was very sure of the reasons for making such a substantial investment.

The SEC has been following suspicious trades in Dow Jones ahead of the News Corporation announcement.

Yesterday Dow Jones said advertising revenue at The Wall Street Journal fell the most in almost two years last month.

Ad sales dropped 12 per cent and volume fell 13 per cent.

Additional reporting: Bloomberg

 

[Wysiwyg]

Today, hours before a trading halt in GGP, the share price has risen over 22%.This is another example of information available to some before being available to the public.

 

[markrmau]

Have a look at FRR, 23/5/7. SP down. vol up.

Profit downgrade announced 24/5/7

 

[krisbarry]

Take a look at WRK over the past week. Massive increase in share price and volume, then went into trading halt, pending drilling results. Great drilling results released, how ironic

Either the lab, the miners, or sally the photocopy chick leaked results. Or maybe it was Bob who fills the water cooler who overheard the results and bought in, whilst telling his mates too.

THIS WAS A VERY OBVIOUS LEAK

 

[krisbarry]

Yep even the dirty wiff of a leak reached the ASX.

WRK has just been queried