Forum Archive Index - April 2000

["Chris" <crodgers@globe.net.nz>]

My undersatnding is that the period of sale is irrelevant - the fact that this person bought the shares with insider knowledge was the no-no.

 

 

 

Derek Watt wrote :

 

Say someone owns 25% of a company and the company
is going to announce some big thing which will
boost the shareprice.

The person wants to trade on the deal but doesn't
wish to be seen doing so, so they set up a seperate
company which buys 4.9% of the first company.

After the announcement the 4.9% lot is sold, no
company announcement, no-ones the wiser, yet the
person cashes in and makes lots of money.

Does anyone know if it is legal to do this sort of
thing?

Say the person waits another year to sell the 4.9%,
would it be legal to sell it then?

Derek W.