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SEC Tags Seven with Stupidity Tax

In the wake of the continuing financial disaster another reminder that a big-name is no guarantee of integrity is probably unnecessary.  We have been warning the investing public of that fact for the past year.  But, a recent enforcement action by the U.S. Securities and Exchange Commission (“SEC”), gives us more evidence to support the conclusion.  [...]

In the wake of the continuing financial disaster another reminder that a big-name is no guarantee of integrity is probably unnecessary.  We have been warning the investing public of that fact for the past year.  But, a recent enforcement action by the U.S. Securities and Exchange Commission (“SEC”), gives us more evidence to support the conclusion.  The SEC has settled insider trading charges against seven individuals, including two who were professionals working for UBS and Morgan Stanley.  Read more about the case here.

We have called the penalties that inside traders have to pay a ’stupidity tax,’ because the SEC is so good at catching insider traders.  I worked on several insider trading cases in my days at the SEC, and therefore know that the SEC’s resources and investigative techniques are equal to any grand scheme the brightest would-be securities criminal might cook up.  If you receive a hot stock tip from someone you suspect is in a position to have inside information, ignore it.  Trust me here.  You’ll be glad you did. 

 

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