Collins was a director and he didn’t sell any of his shares. He passed info about a failed drug test onto his son who in turn told his father-in-law and other family members and they were able to get out before the share price plunged 92%.
He was going to look like a dumb ass either way. Presumably he’d been touting the stock to his family and if they’d lost hundreds of thousands of dollars, they wouldn’t be very happy. I imagine though they came out much worse than if he’d never told them anything, when you take into account the fines and, for his son and maybe a couple of others, the jail sentences.
Originally Posted by Tiny
You're right, he didn't sell his own shares. But how could he be stupid enough to think the SEC wouldn't track and look up the names of the major sellers just before the public announcement (of the failed drug trial) and notice they included his family members? Then all the SEC needed to do was obtain phone records and interview everyone involved, including the brokers who were probably told to hurry up and dump the shares before the Australian markets opened the next day.
I’d suspect most people would do the same thing, IF they didn’t think they’d get caught. As I mentioned above, he didn’t profit from the inside information, although his son and others did. And “profit” may not be the best word, it was more like avoiding a loss
Originally Posted by Tiny
Doesn't matter, it's still insider trading. I think in terms of risk. Even if the chance of being caught was only, say, 5%, it's not worth it to me. If you pick a stock based on the publicly available fundamentals and you make money, you can pat yourself on the back and tell yourself how smart you are. If you make a profit due to insider info, you not only feel like a cheat but you have to worry afterwards about being caught (unless you're a corrupt sociopath like Bernie Madoff or Ivan Boesky, in which case it wouldn't bother you).
Why take stupid risks when you can make big bucks honestly? A blind, dart-throwing monkey can make money in today's bull market. And it's all thanks to trumpy and his pro-growth policies of cutting taxes and rolling back odumbo's regulatory over-reach!!
Right, sissy chap?
