The John Edwards Investments Scandal Thread

[GWB]

Well, we've been talking about Cheney forever, and nothing untowards has been found....

Look at this suspicious activity by John Edwards. He made more than 200 security trades in 2003 while a US Senator. A big asset of his is the American Europacific fund - another Asia connection?

Edwards' Investments (http://story.news.yahoo.com/news?tmpl=story&cid=694&ncid=696&e=1&u=/ap/20040706/ap_on_el_pr/edwards_finances)

Edwards doesn't pay his Taxes (http://www.gop.com/News/Read.aspx?ID=3218)

[cardcounter0]

Has the SEC ever made a final determination about Bush's violation of SEC regulations and insider trading with Harken Energy stock?

Ask your Bush's Uncle Poppy about Edwards, he is the expert on Asian connections. OR maybe Neil Bush ran into him in a Hotel in China. They could have shared the same hooker.

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[ QUOTE ]
Has the SEC ever made a final determination about Bush's violation of SEC regulations and insider trading with Harken Energy stock?

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That was a true tempest in a teapot. The markets queue off of the announcement to sell, not the actual sale itself.

As far as Edwards is concerned. Edwards is very wealthy and the amounts involved in the trading aren't that much really. Also this kind of trading seems "normal" to me so GWB correct me where I'm wrong here.

[cardcounter0]

In 1989, while Bush was a board member, and a member of the financial audit committee, of Harkin Energy Corp, the company pioneered “aggressive bookkeeping,” hiding millions of dollars in losses through the sale of a subsidiary to a group of insiders. The SEC censured Harkin and forced it to amend its books to show the losses. Bush sold his own inflated Harkin stock for $848,000 in 1990, two months before the company reported further losses forcing its stock value down to a quarter of the value it held when Bush sold it. Though, as an insider, he was required by the SEC to immediately report the sale, he waited for 34 weeks before reporting it. Bush was quietly investigated and censured by the SEC but escaped criminal charges, probably due to the fact that his father was president at the time.

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[ QUOTE ]
Bush sold his own inflated Harkin stock for $848,000 in 1990, two months before the company reported further losses forcing its stock value down to a quarter of the value it held when Bush sold it. Though, as an insider, he was required by the SEC to immediately report the sale, he waited for 34 weeks before reporting it. Bush was quietly investigated and censured by the SEC but escaped criminal charges, probably due to the fact that his father was president at the time.

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You ignore the fact that he announced his intention to sell in full compliance with SEC regulations. Again the market get's it's queue from the public announcement of the intended sale not the actual execution which is assumed to take place.

[cardcounter0]

"When President Bush sold more than 200,000 shares in Harken Energy Corp. in June 1990, he said he did not know the company was in bad financial shape. But memos from the company show in great detail that he was apprised of how badly the company's fortunes were failing before he sold his stock -- and that he was warned by company lawyers against selling stock based on insider information."

Oh, and another tidbit.

"The sale of a subsidiary to a group of insiders" -- Well the Harvard University Trust Fund was a big investor in this and lost a lot of money. Guess who was sitting on the Board of Directors when this bad investment was made? Daddy George Bush, of course. The Bush's are willing bankrupt Universities just as quickly as the taxpayer if one of their own can make a buck.

[cardcounter0]

What part of didn't you understand?

You are SUPPOSED to announce your intentions immediately.
Bush announced and filed 34 WEEKS AFTER the sale.

[cardcounter0]

You said:
"You ignore the fact that he announced his intention to sell in full compliance with SEC regulations."

The FACTS:
"Bush was quietly investigated and censured by the SEC but escaped criminal charges."

Some how censure and possible criminal charges doesn't sound like full complaince to me.

[cardcounter0]

In his former position as CEO of Halliburton, he presided over an Enron style cooking of the corporation’s books. As with the Enron case, this bit of “aggressive accounting” was done to inflate perceived corporate profits, and hence, stock values. Observers estimate that under Cheney, Halliburton overstated profits by a minimum of $100 million. Cheney, who “earned” over $36 million during his last year with Halliburton (2000), cashed out when stocks were overvalued.

Now he is facing pending investor lawsuit as well as a criminal investigation. Halliburton also received almost $2 billion in federal loans under Cheney’s watch while it’s subsidiaries conducted business with Libya, Iraq and Burma.

Nothing like doing business with Terrorist Nations, as long as your company is the one making the buck. Cheney still "owns" Halliburton stock, it is sitting in a trust fund that he doesn't have direct control over, and he gets $100,000 a year defered compensation (ie. he is still on the payroll).

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[ QUOTE ]
What part of didn't you understand?

You are SUPPOSED to announce your intentions immediately.


[/ QUOTE ]

He did. He filed a Form 144, also known as a Notice of Intent to Sell before he sold the shares. A corporate insider has to announce his intention to sell before he can actually sell which Bush did. This is the notice that markets key off of and it is generally assumed that the sale will take place. After the sale Bush was supposed to file another form with the SEC that the sale had been completed. He was required to do this within 10 days after the sale. Bush claims it was a screw up by his lawyers and Bush did publicly announce that he had sold the shares.

The relevant facts:

Bush announced his intent to sell prior to selling his shares in full compliance with SEC regulations. The reason for this SEC rule is to provide a way for insiders to sell their shares will the markets have the knowledge that an insider is selling their shares before they are actually sold. In this way the markets get to evaluate the sale and what the insider might know. If an insider announces that they intend to sell a major portion of their holdings the markets will certainly take notice. This notice of intention to sell is for all practical purposes interpreted by the markets. You're showing your complete lack of knowledge when you imply that the markets react after the forms are filed stating that sale took place.

Bush sold his shares after announcing his intent to sell in full compliance with SEC regulations.

Bush failed to file the paperwork within 10 days after he had completed the transaction. I believe that this form was called a form 4.

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....

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[ QUOTE ]
When President Bush sold more than 200,000 shares in Harken Energy Corp. in June 1990, he said he did not know the company was in bad financial shape. But memos from the company show in great detail that he was apprised of how badly the company's fortunes were failing before he sold his stock -- and that he was warned by company lawyers against selling stock based on insider information."

[/ QUOTE ]

So? He announced his intent to sell in full compliance with SEC rules. If the markets shrug it off so be it.

[ QUOTE ]
The sale of a subsidiary to a group of insiders" -- Well the Harvard University Trust Fund was a big investor in this and lost a lot of money. Guess who was sitting on the Board of Directors when this bad investment was made? Daddy George Bush, of course. The Bush's are willing bankrupt Universities just as quickly as the taxpayer if one of their own can make a buck.

[/ QUOTE ]

See answer above.

[nicky g]

"So? He announced his intent to sell in full compliance with SEC rules. If the markets shrug it off so be it."

Are you allowed to trade based on insider info if you announce your intent to sell (but not the reason)?

[andyfox]

Deferred compensation doesn't mean one is still on the payroll. It is income earned from past employment that is paid at a later date.

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Are you allowed to trade based on insider info even if you announce your intent to sell (but not the reason)?

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Yes assuming you follow the SEC rules for announcing your intent to sell. However, Sarbanes-Oxley has a nice little feature that if you sign bogus quarterly reports and annual reports more or less you can be criminally prosecuted. If somebody wants to dig up some real good dirt on Bush they may want to dig up the old Harken quarterly and annual reports. Sarbanes-Oxley was not in effect at that time.

[nicky g]

Thanks. Is the rationale that if you announce your intent, the market will figure out you know something they don;t and behave accordingly?

[andyfox]

"'On the campaign trail Edwards supports increasing taxes on American families but at home isn’t paying. Maybe Senator Edwards thinks only the little people should pay taxes,' said Republican National Committee Communications Director Jim Dyke. 'Or maybe this is just an innovative new tax relief plan: don’t pay.'"

Edwards, like Kerry, has called for repealing the Bush income tax cuts only for those making over $200,000 a year. What percentage of American families is this?

[adios]

See my edited response about Sarbanes-Oxley. I'll repeat it here. If CEO's sign bogus quarterly reports and annual reports more or less they can be criminally prosecuted. Sarbanes-Oxley was not in effect at the time of the Bush sale. Someone may find some fertile ground for Bush dirty laundry by digging through the old Harken energy SEC filed documents.

[cardcounter0]

Maybe we could set up little jars at McDonalds for people to throw their change in, just like they do for Jerry's Kids, to help those poor families making over $200,000 a year that are going to have their taxes changed back to the old levels. I lie awake at night worrying about those people. Who will tip the golf caddies if we take away their tax cuts?

[GWB]

Inside John Edwards' wallet (http://www.washingtontimes.com/op-ed/20040709-084251-5440r.htm)