On Christmas Day the Shock Exchange coined Valeant and Ackman the “Edgar Allan Poe of insider trading.” The Allergan trade was the perfect crime – it was done in plain sight of the regulators and the media:
The Purloined Letter” is one of Edgar Allen Poe’s most famous crime stories. A woman had her letter stolen by an unnamed minister. It contained information that could have been damaging and the thief used such contents to blackmail the owner. Though detectives searched the minister’s person and rigorously searched his hotel, they could not find it. It was amateur detective C. Auguste Dupin who discovered the letter. The blackmailer knew the detectives would suspect he would use an elaborate hiding place to conceal the letter. Instead, he hid it in plain sight.
The moral of the story is if you want your crime to go undetected then commit it in plain sight. Next month Valeant (VRX) and Bill Ackman of Pershing Square (OTCPK:PSHZF) could face a jury trial for insider trading in Allergan (AGN) shares. The plaintiffs’ argument suggest the insider trading activities occurred in plain sight of regulators and the media.
The Shock Exchange pointed out the folly of trading on material, non-public information and then trying to convince a judge that it was legal. Ackman apparently got assurances from Cleary Gottlieb, and a high-ranking member of the SEC that what he did was legal. The Shock Exchange asked the question, “If insider trading trading any less illegal because it’s done in plain sight?”
Four days later Valeant and Ackman settled the insider trading case with AGN investors for $290 million – less than 15 cents on the dollar. They had been fighting shareholders’ claims for over two years. Within four days of the Shock Exchange pointing out the folly of the trade Valeant and Ackman settled. What’s the odds?
On Trump And The Global Economy
Trump And The Global Economy Town Hall took place October 24th in Fort Greene. It Featured Professor Lance Brofman, Coconut Rob (Coconut Rob Smoothies), Wuyi Jacobs (AfroBeats Radio) and Ralph Baker, author of Shock Exchange: How Inner-City Kids From Brooklyn Predicted the Great Recession and the Pain Ahead.
The event was well-received by the community. We parsed through President Trump’s proposed tax plan and [i] how it was pure economic folly and [ii] high net worth individuals could potentially game the system by shifting income around. Apparently, Kansas Coach Bill Self did this when the state of Kansas cut taxes in the past. We discussed the pros and cons of technology on workers and the economy. How will the economy and country prosper under Trump’s leadership vis-a-vis Obama? What’s behind the verbal sparring with black athletes, ESPN’s Jemele Hill and North Korea’s Kim Jong Un?
