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SUNNY Temp: 96 °F Wind: WNW at 11 mph Monday, September 2, 2002 SECTIONS Home Page Local News Sports Business Obituaries Life Opinion - Politics AP News Weather Classified Archives Site Map EXTRA Cyberchef E The People Golf Job Network Headbone Zone Wellness Connection Movie Times Newspaper in Education Oregon CarZone Outdoor Journal Personals Prime Times Real Estate Tempo A & E TV Times W3 Magazine CLASSIFIEDS Find a Car Find a Home Find a Job Find Everything E SOUTHERN OREGON Destinations Automotive Communities Employment Entertainment Publications Real Estate Recreation Shopping Calendar ABOUT US FAQ What's New Advertise Home Delivery Classified Ad Contact Us Media Kit Jobs @ Mail Tribune Email Story to a Friend August 13, 2002 Since you asked Insider trading is breach of trust I understand Martha Stewart could go to jail for insider trading. I hear that the ImClone president is in trouble for this, and that President Bush was in trouble for it. I don’t get it. If you know something about a company, why can’t you use that to buy or sell its stock? What, exactly, is insider trading? — Cathy V., Ashland Stewart has not yet been charged. Bush was investigated and neither prosecuted nor exonerated. Samuel D. Waksal, on the other hand, the former CEO of ImClone Systems, has been indicted for insider trading, among other charges, and faces possible fines in the millions and many years in prison. He is charged with illegally tipping off people to dump ImClone shares before the news broke that the Food and Drug Administration would reject ImClone’s first product, the cancer drug Erbitux. Waksal’s father and daughter are accused of together selling more than $10 million in shares. Waksal is also accused, among other things, of trying to sell more shares by transferring them to another account in an end-run around a ban on trading by company insiders. Stewart sold her stock — nearly 4,000 shares at $58 — on the same day Waksal’s father and daughter sold theirs. Stewart is a personal friend of Waksal’s. She has denied illegal trading. It is illegal for a person to trade a stock if he or she has information that’s not public and got it from an inside source who had a duty not to disclose it. A CEO such as Waksal has a fiduciary duty to not give out information that could enable somebody to profit or avoid a loss. Case law is complex and evolving, but the legal key is whether the tipster was guilty of a breach of duty. Experts say that for the markets to work, they must be perceived as fair and open, not as a game rigged for insiders. Send questions to "Since You Asked," Mail Tribune Newsroom, P.O. Box 1108, Medford, OR 97501; by fax to 541-776-4376; or by e-mail to [email protected] Printer Friendly Version Email Story to a Friend Subscribe Archive: Click to Search Mail Tribune Home Local News | Sports | Business | Obituaries | Life Opinion - Politics | AP News | Archives | Site Map E Southern Oregon | Classified Copyright 1997-2002 Mail Tribune. All rights reserved. Privacy Policy web master feedback A D V E R T I S E R S