ethical/insider trading issue maybe? into, situation, executive, investment, rapid

slackeranalyst

Lets pretend i knew about a situation where an executive at my firm purchased common shares in a personal acct in another financial company that ran into rapid trouble and imminent bankruptcy unless a bailout package was arranged.  Further, suppose the investment in common shares took place on a friday and then the troubled financial company announces a consortium of bailout partners over the weekend,one of the constituents of which is the firm to which my executive belongs.  Any thoughts on whether or not there are ethical or even legal issues here?  Seems strange that the executive would be able to make an investment in the ccmmon stock with the knowledge of a soon to be announced bailout when the rest of market participants werent privy to that knowledge….

mp3bu

Well there are really three possible explanations here:
1) He was the bailout.
2) Dumb luck.
3) (And very likely) he had some form of info in one way or another that he traded on.
Now, without knowing what info he had or what conversation he heard, it’s hard to say whether it falls under insider trading.  But one thing I can say is that I’m 100% sure those shares should have been disclosed to the internal department that manages and tracks personal transactions.  Whether or not I turned him in would be a factor of how much I despised him, how much money I assumed had been moved, whether or not this would severely ruin my career at that firm, how concrete my intel was and if there was a reward.  Assuming you had info, if this is a legit bigtime executive, I’d send the tip to either new york DA or SEC.  Otherwise, internal dept.