WikiLeaks outs JP Morgan Insider Trading via Legal Loophole
WikiLeaks is surely on a roll. They’ve outed the way JP Morgan takes advantage of a SEC Rule Loophole by walking right up to the knife edge of it. Because of the laxness in the language of the SEC rule 10b5-1, it allows large players to put stock into a specific program to be sold at a later date in a “planned” manner. “As reported in BusinessWeek on Nov. 6, Alan D. Jagolinzer, an assistant professor at Stanford University Graduate School of Business, recently completed a study of roughly 117,000 trades in 10b5-1 plans by 3,426 executives at 1,241 companies. He found that trades inside the plans beat the market by 6% over six months. By contrast, executives at the same firms who traded without the benefit of plans beat the market by only 1.9%.” Apparently this is (barely) legal. This loosey goosey SEC regulation has been on the books since . . . wowza, who woulda guessed? Since the year Bush was voted in. What a surprise!
