SEC filings yesterday indicate sales of almost 400,000 shares on Wednesday/Thursday.
well for my part, I did send the editors a note with links to all the related pieces. Whether they see it as news worthy or just another rainy day on Wall Street is up to them. What's been done is blatent, but not illegal per se. It's tantamount to cheating on your wife with three whores while in Las Vegas. It's blatently reflects on one's character but it's not illegal !!!!
HO HO HO !!! :)
A quick read tells me these were sold in accordance with a Rule 10b5-1 Plan
According to Wiki, these sales were planned in advance and are not the result of newly acquired inside info.
My conclusion 1. they planned to sell to meet their investment objectives such as diversifying. In other words, these execs are anything but "dumping" stock.
Conclusion 2. Anyone hyping these planned sales as "dumps" is either incapable of reading the SEC report or is short and desperate.
Affirmative legal defense for planned trades
In paragraph (c), however, the SEC created an affirmative defense to any charge of insider trading, "designed to cover situations in which a person can demonstrate that the material nonpublic information was not a factor in the trading decision." The provision allows an affirmative defense to insider trading when the trade was made pursuant to a contract, instructions given to another, or a written plan that "[d]id not permit the person to exercise any subsequent influence over how, when, or whether to effect purchases or sales" (10b5-1(c)(1)(i)(B)(3)), and where the plan (or contract or instructions) was created before the person had inside information.
For example, a CEO of a company could call a broker on January 1 and enter into a plan to sell a particular quantity of shares of his company's stock on March 1, find out terrible news about his company on February 1 that will not become public until April 1, and then go forward with the March 1 sale anyway, saving himself from losing money when the bad news becomes public. Under the terms of Rule 10b5-1(b) this is insider trading because the CEO "was aware" of the inside information when he made the trade. But he can assert an affirmative defense under Rule 10b5-1(c), because he planned the trade before he learned the inside information.
The issue here not one of legality, it's a matter of honest and ethical behavior, neither of which are really even reasonable expectations from the investment banking industry in general or GS in particular. At this point, if these executives thought CIE would be in the 20s any time soon, they could have simply canceled their 10b5 sales plan, which any rational person would do if they in fact believed their shares would be worth 20-25% more in the very near future.
Conversely, if they felt their price pumping actions had their intended effect and that the stock would NOT see $20 anytime soon, they would go thru with their 10b5 sales plans as structured at some point in the future.
What CIE and GS have done here is just a demonstration of how business is done in this country at this level of play. It's not "illegal", it's just not very ethical either.
The old maxim remains. You can steal a lot more money with a briefcase and a shiney pair of shoes than you can with a machine gun !!!! The only difference between these guys and third world government officials (including our own) is location, naive language and weapon of choice. The result is the same; they wind up with a lot of someone else's money.
Dude, you gotta grow and learn to trust NO ONE !!!!
These execs. can tell GS to sell X number of their shares on some future date pursuant to 10b5 treatment. Prior to that date, the execs and Company can publish "pump" news to move the share price along. They can get their co-owner / partner, in this case GS, to feed the pump mill with an upgrade and more soft information. The two collaborate to pump up the stock price some time shortly before their 10b5 trades are to execute knowing. They are not trading on "inside information" per se. They set their trade date well in advance. Then they set about to pump up the stock price somewhat prior to the know 10b5 date. The end result is that their 10b5 sales occur during a period when the price is substantially higher than when they established the 10b5 sale "program".
You can paint it any way you want but when the CHIEF EXLORATION OFFICER sells 15% of his holdings, the intent is prima face and implies volumes about the Exploration Officer's beliefs regarding the Company's tactical circumstances at the time. IF he thought the Company's explorations were as rosie as what was being presented to the public, he could, in this case, cancel the 10b5 sales agreement. ANY RATIONAL PERSON with his knowledge of the Company's prospects would have cancelled the 10b5 agreement if they thought all the hype was in fact true.
What's been done here can easily be painted as completely legal. That's NOT THE ISSUE. The guy voted with his feet by selling 15% of his holdings while the shares has been hyped up through all the usual means available to talk and bid up a stock price. A 15% reduction in a single holding is material any way you look at it.
You're welcome to read/interpret however you like and put on the rose-colored glasses simply because a filing says it is a result of a 10b5-1 plan. However, in my book, a sale is a sale, regardless if someone tries to hide behind a veil pointing to a 10b5-1 plan.
Tell me, when were the 10b5-1 plans filed for these folks and put into effect? Obviously, for these folks, there were no prior sales under these plans, so when exactly did they put them in place? Couldn't have been very long ago, could it? And quite interesting how the sales all took place on the same days - isn't it? What incredibly great luck for them to have made the sales on the 21st and 22nd coincidentally right on the day and following day of such great news - isn't it? Yet they had absolutely no idea such news was coming, because their 10b5-1 plans were already previously in place - isn't that right?
Time to take off the rose-colored glasses friend.
I'm going to forward this to someone I know at The Houston Chronicle and hopefully to a freelance writer that writes for Barrons from time to time.
The Houston Chronicle may not touch it because Houston is ALL about business and the O&G business is definitely one of the main pillars however, this seems like just the kind of thing Barron's would write about freely.
This is the most insightful post offered to date AND an EXCELLENT indicator of how to value the Company.
It's awefully telling when the Chief Exploration Officer sells 15% of his holdings for roughly $15.50 a share.
Bottomline, the senior execs needed some money to see them through the coming year "in the manner in which they are accustomed".
This also shows their collective confidence in all the "raised estimates" offered up in the past week.
THIS is truly hilarious. Now we know why ordinary people want to " Occupy Wall Street" !!!
Thank you again for this VERY insightful posting !!!