A story: Theresa Heinz-Kerry and the parking tickets

[GWB]

As told by Congressman Jack Kingston:

"I do not know if my colleagues know this story, but one time Mrs. [Teresa Heinz] Kerry got some parking tickets for parking in front of a fire hydrant. Now, what would you do if you were a liberal Democrat?
"Under that circumstance, you would think, I would pay the fine. In fact, I would send a little more because I believe in government, and I want to help subsidize government," he says. "No, instead they simply moved the fire hydrant. Now ... that is some serious money."

article (quote from end of article) (http://www.washingtontimes.com/national/inbeltway.htm)

[Rooster71]

[ QUOTE ]
As told by Congressman Jack Kingston:

"I do not know if my colleagues know this story, but one time Mrs. [Teresa Heinz] Kerry got some parking tickets for parking in front of a fire hydrant. Now, what would you do if you were a liberal Democrat?
"Under that circumstance, you would think, I would pay the fine. In fact, I would send a little more because I believe in government, and I want to help subsidize government," he says. "No, instead they simply moved the fire hydrant. Now ... that is some serious money."

article (quote from end of article) (http://www.washingtontimes.com/national/inbeltway.htm)

[/ QUOTE ]

Man, that is some hard-hitting substantive journalism......yea, right! LOL

"Are you suggesting this pair of Johns trying to unseat George W. Bush and Dick Cheney doesn't connect with the average Joe?"

I am so tired of hearing this crap. When someone asks this question, they should explain how Bush/Cheney "connect with the average Joe." I would love to hear that explanation.

[Boris]

How bout the story of Laura Bush running a stop sign and causing a deadly accident?

[cardcounter0]

Well, Bush did a lot of coke, got pulled over a couple of times for drunk driving, was a big boozer, did everything he could to avoid active service during the war, was a general screw-up at previous jobs --- I would think some segment of the population could identify with that!

[cardcounter0]

She was drunk and high at the time, so there should be some people that can identify with that one too.

[Rooster71]

[ QUOTE ]
How bout the story of Laura Bush running a stop sign and causing a deadly accident?

[/ QUOTE ]
Laura Bush is a conservative Christian woman with "family values." She would never be involved in this type of incident. It's all liberal propaganda!

[Wake up CALL]

[ QUOTE ]
Well, Bush did a lot of coke, got pulled over a couple of times for drunk driving, was a big boozer, did everything he could to avoid active service during the war, was a general screw-up at previous jobs --- I would think some segment of the population could identify with that!

[/ QUOTE ]

Yep the draft doging, pot smoking California hippie Liberals. However with all the dead brain cells they have become hypocrites and side with the two Johns.

[andyfox]

When I was in Boston we took a tour and said fire hydrant was one of the stops on the tour. Seriously.

Again, Mr. President, surely you can offer us more than this, fire hydrants and such. Mrs. Kerry is not running for office. With your Harken and Texas Rangers shennanigans, I'd avoid such discussions.

[Utah]

Since when is Harkens a Shennaigan? I have yet to see anything that shows Bush did anything wrong. Can you point me to something?

I dont mind that she moved the fire hydrant. However, I dont want to hear from the ultra rich that we need to take care of the little people. Give me a break.

[andyfox]

http://www.nationalreview.com/york/york071702.asp

http://www.buzzflash.com/perspectives/bush_harken.html

[jokerswild]

Didn't Laura Bush run over a pedestrian and accidently kill the person?

[jokerswild]

Wrong. Most hippies had no money and ended up lving marginal lives.

Very few spent the majority of their adult lives getting a pass because their name was George Bush.

[Utah]

Nothing in these two articles show it was a shennanigan (I love that word).

I did a little investigating, but it is hard to get info that far back. I thought the best judge would be the action of the stock price. If the stock went like this, you MIGHT have a story:

XXXXXXXXX
..............X
..............X
..............XXXXXXXXX

However, the stock was already declining, there wasnt any major sudden drop from the release of a report and the stock soon recovered and went higher.

The company might have been having difficulties, but that was obviously known in the investment community as the stock was slowly declining since early in the year. Bush sold part way down that path, not at the start of it if my timeline is accurate.

for the 1990 stock price movement see:
http://finance.yahoo.com/q/bc?s=HEC&t=my&l=on&z=l&q=l&c=

Its critical to know how the markets operate and to know the fundamental principles of market efficiency. The only critical period to analyze is the period immediately before GWB sold his stock and the release of any pertinent information. This is a MAX window of a couple of weeks and this window might not even exist.

The reason for this is that a stock price at any given point includes all past information and all the best guesses of investors what will happen based on available information. This takes place in real time and it is almost instantanious. For example, if a negative company report is released at 9:00 a.m. and the stock immediately drops $5 dollars and over the next two days drops another $10, the report is only responsible for the $5, not the additional $10. It cant be any other way. If it were any other way, investors would basically know the future and they would always make a killing.

The same thing applies to GWB's case. The stock slide from July to January is of ZERO importance in analyzing whether there was a shennanigan and it shouldnt be brought up. To bring it up as relevant shows an ignorance of how markets work.

This doesnt mean Bush didnt have inside information and that he acted on it. However, if does refute a major point of suspicion by showing it to be irrelevant.

Another point to note is that a negative release in of itself is of no importance to the stock price. The only thing of importance is whether that report in better or worse than investors expected. That is why companies can release terrible reports and the stock price goes up. So in GWB's case, the fact that the company was having difficulties means nothing.

[cardcounter0]

Gee. What a wonderful new definition for "insider trading".
Ought to check the SEC definition, I don't see any clauses that state "Unless your name is Bush ..."

Bush was a member of the audit committee. He had advance knowledge of the financial statements (particularly the one coming out after his sale showing a large loss).

He was briefed by Authur Anderson Consultants on the pending loss and the future effect on the stock price, something the public did not know.

Company Lawyers advised that he should not sell because of insider trading conflitcts.

He privately arranged to unload his stock to a Trust Fund that his Daddy was a board member of.

He failed to file the proper SEC forms in a timely manner.

Since his last name is BUSH, people still claim when he takes a huge dump it smells just like roses.

[MuckJagger]

It's d-o-d-g-i-n-g.

Muck

[Utah]

You should actually read the post you are responding to.

I did not make any comments on whether he had inside information and I did not define the term. Nor, did I defend him. I simply commented on the action of the stock and how that has no bearing on the situation.

[adios]

[ QUOTE ]
Its critical to know how the markets operate and to know the fundamental principles of market efficiency. The only critical period to analyze is the period immediately before GWB sold his stock and the release of any pertinent information. This is a MAX window of a couple of weeks and this window might not even exist.

The reason for this is that a stock price at any given point includes all past information and all the best guesses of investors what will happen based on available information.

[/ QUOTE ]

I know I'm "preaching to the choir" here. He announced his intended sale in conformity with SEC rules which is the queue to the market i.e. the market has new information at which to set the valuation of the company. If financial statements, 10-Q's and 10-K's were misleading that's another matter. He's not obligated to give a reason for the sale as many have implied. It's funny how the posters that call him an idiot now believe that he's thoroughly knowledgeable about GAAP. What's hilarious about some of the comments from the Bush bashers is that they keep bringing up the fact that he was on the audit committee. As far as I know there were ZERO accounting irregularities. The problem wasn't shady accounting, the problem was poor sales. Case closed.

[cardcounter0]

Actually, the problem WAS shady accounting. It almost looks like Arthur Anderson used Harken Energy as a testing ground, as the hiding of debt (which the SEC later made Harken restate), was the exact methodology used later by ENRON.

Keep digging that hole, eventually you might stike oil.

Insider Trading: Is using information (that one might get serving on internal committees like an audit commitee or talking to the accounting folks like Anderson), and using that information that is not available to the general public, to make decisions to buy or sale stock.

It DOESN'T matter if you announce your sale before hand. It DOESN'T matter if you put up big huge billboards saying "I'm going to sell". If you are trading based on information that you have gotten from the company that the general public doesn't have -- It is insider trading.

[Rooster71]

[ QUOTE ]
[ QUOTE ]
Its critical to know how the markets operate and to know the fundamental principles of market efficiency. The only critical period to analyze is the period immediately before GWB sold his stock and the release of any pertinent information. This is a MAX window of a couple of weeks and this window might not even exist.

The reason for this is that a stock price at any given point includes all past information and all the best guesses of investors what will happen based on available information.

[/ QUOTE ]

I know I'm "preaching to the choir" here. He announced his intended sale in conformity with SEC rules which is the queue to the market i.e. the market has new information at which to set the valuation of the company. If financial statements, 10-Q's and 10-K's were misleading that's another matter. He's not obligated to give a reason for the sale as many have implied. It's funny how the posters that call him an idiot now believe that he's thoroughly knowledgeable about GAAP. What's hilarious about some of the comments from the Bush bashers is that they keep bringing up the fact that he was on the audit committee. As far as I know there were ZERO accounting irregularities. The problem wasn't shady accounting, the problem was poor sales. Case closed.

[/ QUOTE ]
The problem was poor sales? The problem is an insider selling stock using information that Joe Public does not have. The reason people bring up the fact that he was on the audit committee is that he had knowledge of the poor performance that was to be shown in upcoming financial statements.

Nobody is arguing that there were accounting irregularities. Noboby is arguing that Bush should have knowledge of GAAP. Why is it that the pro-Bush crowd always wants to change the subject? He used inside information to dump stock to a third party who had ties to the family and didn't file the necessary paper in a timely manner. That's the point.

[Rooster71]

[ QUOTE ]
Actually, the problem WAS shady accounting. It almost looks like Arthur Anderson used Harken Energy as a testing ground, as the hiding of debt (which the SEC later made Harken restate), was the exact methodology used later by ENRON.

[/ QUOTE ]
I did not know this, but it sounds familiar.

Why is it that the pro-big business conservative types always want to harp on "values" and "character", but in their own business dealings they have to come up with new ways to screw people? I know I'll catch alot of crap for that statement, but if a company is worthy of investing in, why is there a need for creative accounting? Isn't one of the main purposes of corporate accounting of get an accurate picture of a company's financial situation?

[adios]

[ QUOTE ]
Actually, the problem WAS shady accounting. It almost looks like Arthur Anderson used Harken Energy as a testing ground, as the hiding of debt (which the SEC later made Harken restate), was the exact methodology used later by ENRON.

[/ QUOTE ]

It wasn't anything like Enron. The Enron fraud was perpetrated via round trip trading and hidden off balance sheet debt. The Harken-Andarko partnership transferred liabilities off of Harken's balance sheet but it was reported properly. Companies use off balance sheet entities legally frequently. Here's an article about the Harken Andarko parternership:

Harvard role in Harken called deeper (http://foi.missouri.edu/usenergypolicies/harvardharkenglobe.html)

An exerpt from the article:

In May 1990, Black said, the Harvard fund and another unnamed shareholder loaned Harken a total of $46 million. But with Harken still having a debt load, the fund and Harken formed the Harken Anadarko Partnership in December 1990. The partnership was "off the Harken books," Black said, which he said means that Harken's stake in the partnership was reported but the financial details did not need to be revealed to the Securities and Exchange Commission.

Such a partnership was legal, he said.

Harvard role in Harken called deeper


By Michael Kranish
The Globe and Mail
October 9, 2002
WASHINGTON - Harvard University's financial relationship with President Bush's former oil company was deeper than previously understood, with the university's management fund creating a separate "off the books" partnership with Harken Energy Corp. that helped keep afloat the financially troubled company, according to a report to be released today.

HarvardWatch, a student-alumni group that monitors the school's investments, plans to issue the report and say that it has analyzed documents showing that the Harvard fund, an independent entity that manages the university's endowment, formed a partnership in 1990 with Bush's oil firm called the Harken Anadarko Partnership. The partnership effectively removed $20 million of debt from Harken's books, relieving the Texas company's short-term financial problems.

About the same time, the Harvard fund invested about $30 million in Harken, which also helped keep the firm afloat. The partnership has not been mentioned in recent accounts of Bush's financial dealings in the oil business.

William K. Black, a former federal banking regulator, said in a telephone interview that he has examined the Harken Anadarko Partnership and concluded the arrangement was a significant expansion of the Harvard fund's involvement in the company beyond the $30 million investment.

"Harvard had a dramatically larger financial stake and a much more interesting financial stake" than was previously understood, Black said. "It all serves as a partnership device to move money from Harvard to Harken. This is beyond nuts from an institutional investor's standpoint."

The creation of the partnership was approved in a motion made by Bush, who was on the Harken board of directors and its audit committee, said Black, an assistant professor at the LBJ School of Public Affairs at the University of Texas in Austin.

White House spokesman Scott McClellan said the idea of the partnership came from the Harvard fund.

"This is something that Harvard proposed, and Harvard set the terms of the partnership," McClellan said yesterday. "Harvard proposed the partnership because Harvard decided it wanted to get more involved in the energy sector and be more directly involved in operational aspects."

Representatives of Harvard Management and Houston-based Harken Energy did not return phone calls seeking comment on the partnership.

In May 1990, Black said, the Harvard fund and another unnamed shareholder loaned Harken a total of $46 million. But with Harken still having a debt load, the fund and Harken formed the Harken Anadarko Partnership in December 1990. The partnership was "off the Harken books," Black said, which he said means that Harken's stake in the partnership was reported but the financial details did not need to be revealed to the Securities and Exchange Commission.

Such a partnership was legal, he said.

According to Black, the partnership was set up to help Harken avoid bankruptcy and included $64.5 million worth of unrelated energy properties owned by the Harvard fund and $26 million of drilling operations from Harken - along with $20 million worth of Harken's debt and liabilities. Harken held a 16 percent stake in the partnership while the Harvard fund owned 84 percent, according to HarvardWatch. Nonetheless, the operation was run by Harken, which was paid $1 million per year to operate the partnership's oil and gas ventures, the report said.

Harken "transferred an enormous amount of liabilities to the partnership," Black said. "You don't see the Harvards of the world doing things like this."

With so much debt removed from Harken's own books, Harken's stock price rose and the Harvard fund sold 1.6 million shares during this temporary stock bubble, the report says.

The formation of the partnership, coupled with the fund's purchase of Harken stock, kept the firm afloat financially, according to Black. Black's review of the partnership may add weight to the findings of HarvardWatch.

Black, a registered Democrat, is a well-known specialist in reviewing financial transactions; he was the deputy director of the Federal Savings and Loan Insurance Corp. during the Reagan and first Bush administrations and played a key role in investigating the "Keating Five" scandal that involved five senators. Black also played a role in the investigation that helped lead to the resignation of House Speaker Jim Wright, a Democrat. He said he has conducted financial reviews that make him unpopular among Democrats and said he did not examine the Harken partnership for political reasons.

It was 1986 when George W. Bush's struggling oil venture, Spectrum 7, was purchased by Harken. Harken gave Bush a seat on the board of directors and an annual paycheck of $120,000. At the time, Bush's father, George H. W. Bush, was vice president. It was around this same time that the Harvard fund began investing in Harken. The fund eventually poured $30 million into Harken and became the largest shareholder. A Harvard Management official, Michael Eisenson, was given a seat on the Harken board.

There was no shady accounting and it's not even comparable to Enron in the least

[ QUOTE ]
Insider Trading: Is using information (that one might get serving on internal committees like an audit commitee or talking to the accounting folks like Anderson), and using that information that is not available to the general public, to make decisions to buy or sale stock.

[/ QUOTE ]

Is this is statement that insiders can't buy and sell their stock that they have knowledge about? That's not the case at all. Insiders can sell but there is a process that has to be followed and Bush was in violation of not completeing a report after his sale but was in compliance with announcing his sale.

[ QUOTE ]
It DOESN'T matter if you announce your sale before hand.

[/ QUOTE ]

Yes it does.

[ QUOTE ]
It DOESN'T matter if you put up big huge billboards saying "I'm going to sell".

[/ QUOTE ]

If you say so.

[ QUOTE ]
If you are trading based on information that you have gotten from the company that the general public doesn't have -- It is insider trading.

[/ QUOTE ]

Insider trading per se is not illegal.

Defining Illegal Insider Trading (http://www.investopedia.com/articles/03/100803.asp)

note the following excerpt:

In August 2000, the United States (US) the Securities and Exchange Commission (SEC) adopted new rules regarding insider trading (made effective in October of the same year). Under Rule 10b5-1, the SEC defines insider trading as any securities transaction made when the person behind the trade is aware of non-public material information, and is hence violating his or her duty to maintain confidentiality of such knowledge.

Prior to regulation FD in 2000 this was not the case. Another point that makes your claims hilarious is that the stock eventually tripled after Bush sold his shares (from the chart Utah posted). Stocks are inherently volatile in price in the short run. Guess where the stock price is of Imclone, the stock that Stewart got in trouble for selling, is today? Stewart bailed at $59 a share, today Imclone is selling for $79 a share. Case closed.

Defining Illegal Insider Trading
Reem Heakal (Investopedia.com)



Printer friendly version



When hearing news stories about illegal insider trading activity, investors usually take notice because it's an activity that affects them. Although there are legal forms of insider trading (more of which you can learn about in our articles "Uncovering Insider Trading" and "When Insiders Buy, Should You Join Them?"), the better you understand why illegal insider trading is a crime, the better you understand how the market works. Here we discuss what an illegal insider is, how it compromises the essential conditions of a capital market, and what defines an insider.



What Is It and Why Is It Harmful?
Insider trading occurs when a trade has been influenced by the privileged possession of corporate information that has not yet been made public. Because the information is not available to other investors, a person using such knowledge is trying to gain an unfair advantage over the rest of the market.

Using non-public information for making a trade violates transparency, which is the basis of a capital market. Information in a transparent market disseminates in a manner by which all market participants receive it at more or less the same time. Under these conditions, one investor can gain an advantage over another only through acquiring skill in analyzing and interpreting available information. This skill is based on individual merit and awareness. If one person trades with nonpublic information, he or she gains an advantage that is impossible for the rest of the public. This is not only unfair but disruptive to a properly-functioning market: if insider trading were allowed, investors would lose confidence in their disadvantaged position (in comparison to insiders) and would no longer invest.

The Law
In August 2000, the United States (US) the Securities and Exchange Commission (SEC) adopted new rules regarding insider trading (made effective in October of the same year). Under Rule 10b5-1, the SEC defines insider trading as any securities transaction made when the person behind the trade is aware of non-public material information, and is hence violating his or her duty to maintain confidentiality of such knowledge.

Information is defined as being material if its release could affect the company's stock price. The following are examples of material information: the announcement that the company will receive a tender offer, the declaration of a merger, a positive earnings announcement, the release of the company's discovery such as a new drug, an upcoming dividend announcement, an unreleased "buy" recommendation by an analyst, and finally, an imminent exclusive in a financial news column.

In a further effort to limit the possibility of insider trading, the SEC has also stated in Regulation Fair Disclosure (Reg FD), which was released at the same time as Rule10b5-1, that companies can no longer be selective as to how they release information. This means that analysts or institutional clients cannot be privy to information ahead of retail clients or the general public. Everyone who is not a part of the company is to receive information at the same time.

Who Is an Insider?
For the purposes of defining illegal insider trading, a corporate insider is someone who is privy to information that has yet to be released to the public. If a person is an insider, he or she is expected to maintain a fiduciary duty to the company and to the shareholders and is obligated to retain in confidence the possession of the non-public material information. A person is liable of insider trading when he or she has acted on privileged knowledge in the attempt to make a profit.

Sometimes it is easy to identify who insiders are: CEOs, executives, and directors are of course directly exposed to material information before it's made public. However, according to the misappropriation theory of insider trading cases, certain other relationships automatically give rise to confidentiality. In the second part of Rule 10b5-2, the SEC has outlined three non-exclusive instances that call for a duty of trust or confidentiality: (1) when a person expresses his or her agreement to maintain confidentiality, (2) when history, pattern and/or practice show that a relationship has mutual confidentiality, and (3) when a person hears information from a spouse, parent, child, or sibling (unless it can be proven that such a relationship has not and does not give rise to confidentiality).

Partners In Crime
In insider trading that occurs as a result of information leaking outside of company walls, there is what is known as the "tipper" and the "tippee." The tipper is the person who has broken his or her fiduciary duty when he or she has consciously revealed inside information. The tippee is the person who knowingly uses such information to make a trade (in turn also breaking his or her confidentiality). Both parties typically do so for a mutual monetary benefit. A tipper could be the spouse of a CEO who goes ahead and tells his neighbor inside information. If the neighbor in turn knowingly uses this inside information in a securities transaction, he or she is guilty of insider trading. Even if the tippee does not use the information to trade, the tipper can still be liable for releasing it.

It may be difficult for the SEC to prove whether or not a person is a tippee. The route of insider information and its influence over people's trading is not so easy to track. Take for example a person who initiates a trade because his or her broker advised him or her to buy/sell a share. If the broker broker based the advice on material non-public information, the person who made the trade may or may not have had awareness of the broker's knowledge--evidence to prove what the person knew before the trade may be hard to uncover.

And He Told Two People, And So On And So On…
Oftentimes, people accused of the crime claim that they just overheard someone talking. Take for example a neighbor who overhears a conversation between a CEO and her husband regarding confidential corporate information. If the neighbor then goes ahead and makes a trade based on what was overheard, he or she would be violating the law even though the information was just "innocently" overheard: the neighbor becomes an insider with a fiduciary duty and obligation to confidentiality the moment he or she comes to possess the non-public material information. Since, however, the CEO and her husband did not try to profit from their insider knowledge, they are not necessarily liable of insider trading. In their carelessness, they may, however, be in breach of their confidentiality.

Conclusion
Since illegal insider trading takes advantage not of skill but chance, it threatens investor confidence in the capital market. It is important for you to understand what illegal insider trading is because it may affect you as an investor and the company in which you are investing.

[Boris]

The victim was democrat so no one really cares.

[adios]

[ QUOTE ]
The problem is an insider selling stock using information that Joe Public does not have. The reason people bring up the fact that he was on the audit committee is that he had knowledge of the poor performance that was to be shown in upcoming financial statements.

[/ QUOTE ]

The implication to me is that since he was on the audit commitee is an indictment indicating shady accounting. In fact one claims that it is shady accounting so my statements are relevant. If your claim is that any insider would know such information then being on the audit committee seems irrelevant to me. If your claim is that some insiders are totally oblivious to future company sales while others are not please make that case. Did you examine Utah's chart? It appears to me that Harken eventually tripled in price after the sale do the Harken-Andarko partnership which I believe was initiated after Bush's sale.

[elwoodblues]

[ QUOTE ]
Did you examine Utah's chart? It appears to me that Harken eventually tripled in price after the sale do the Harken-Andarko partnership which I believe was initiated after Bush's sale.

[/ QUOTE ]

You know as well as anyone that how the stock did after the fact is irrelevant to whether the Bush's sale was brought about by inside information.

[adios]

[ QUOTE ]
You know as well as anyone that how the stock did after the fact is irrelevant to whether the Bush's sale was brought about by inside information.

[/ QUOTE ]

The accusation from one poster was that the Harken-Andarko partnership was an accounting fraud and led to the stocks decline. When in fact this in not the case at all. If Bush had knowledge of a future partnership in Harken-Andarko as was implied by one of the posters then Bush sold his stock on an event that would result in the stock going up.

[Utah]

The problem is an insider selling stock using information that Joe Public does not have.
This is only a question at this point. There is zero evidence
at this point to say he did, only some potentially suspicious looking stuff.

What makes you think Joe public didnt have the information? The stock price action before his sale clearly indicates that the public did have the info. The stock action when he announced the sale indicates the public had the information. The stock action after the release of the report indicates the public had the information. The fact that the lawyers, consultants, people within Harken knew the facts indicate that the public had the information. The state of the industry was public. etc...etc...etc.

he reason people bring up the fact that he was on the audit committee is that he had knowledge of the poor performance that was to be shown in upcoming financial statements.

Maybe. Lets even say this is true. What makes this inside information? A public company is constantly talking to the investment community. For your assertion to be true then Harken must have conspired to hide information from the investment community. Please point to any investor lawsuits . They were the ones supposedly harmed. Did they sue?

Why is it that the pro-Bush crowd always wants to change the subject?
Nobody is changing the subject. Just because I am challenging your assertions does not mean that I am pro-Bush . I suggest you keep your emotions out of it and hatred for Bush out of it and try and look at the facts.

He used inside information to dump stock to a third party who had ties to the family and didn't file the necessary paper in a timely manner. That's the point.

First, and again, you have provided ZERO evidence that he had inside information. It appears you are using a, " Damnit! I know he did it!" argument and you refuse to look at the facts. This last statement is telling how clouded your judgement is. Where he put the proceeds has zero bearing on anything - but boy does it sound so conspiratorial to say "third party with ties to the family". Also, the fact that he filed the paperwork late means nothing. Please tell me how this plays into anything. Was the sales not known. What did it supposed;y coverup?

[Utah]

Actually, the problem WAS shady accounting. It almost looks like Arthur Anderson used Harken Energy as a testing ground, as the hiding of debt (which the SEC later made Harken restate), was the exact methodology used later by ENRON.
Its all shady accounting. When I worked in strategic plannning for a Fortune 500, Goldman Sachs was our chief investment bankers. I remember them telling us to switch our lease structure so we could remove them from the balance sheet. WTF? I remember thinking, "if there were no structural changes in the company how the F can you take something off the balance sheet". If I recall correctly, we securitized receivables and took them off the books even though there was risk involved. We did all these weird things: Japanese Leveraged Lease, Preferred stepdown Lease, (indian reservation lease), etc. All things to hide information or to scam the IRS in clear violation of tax law. I even came up with a sale-leaseback plan that would have saved the company $41 million NPV, but the IRS actually put the screws to that one.

People would simply be agast at what happens in public companies.

t DOESN'T matter if you announce your sale before hand. It DOESN'T matter if you put up big huge billboards saying "I'm going to sell". If you are trading based on information that you have gotten from the company that the general public doesn't have -- It is insider trading.
However, the action of the stock price provides VERY strong evidence that this was not true. You could probably make a better case that he was willing to use inside information if he thought he had inside information. But, he really didnt have anything secret.

Okay, lets say Bush knew and was willing to trade on this information. Lets say he is the worst kind of corporate scum that would sell his mother for a $1. Why didnt he buy stock then at the end of the year. Clearly, he must have had insider information telling him it was going to rise.

[Utah]

The last 5 years has shown that auditing is complete B.S. and that there is no oversight.

Audit companies, like KMPG that I worked for on the consulting side, used the audit side to strike super rich consulting deals. Do you think they would ever say anything to piss off their clients. Example, I believe Andersen made $100 million a year in consulting revenue from Enron.

The board of director situation was also a major joke. One of my first jobs in strategic planning was to create the presentations for senior management to give to the board. We would lie our asseses off to protect the senior management from any board wrath. The board can truly be in the dark. The board also didnt really care. We had the CEOs from Coca Cola, 3M, etc. on our board. Do you think these guys were going to really look at anything? F*** no. It was all just a lucrative ego trip: fly in on private jet, go to a few hour meeting with other big honchos, get a huge stock and cash deal, etc.

[Utah]

You know as well as anyone that how the stock did after the fact is irrelevant to whether the Bush's sale was brought about by inside information.

It is 100% relevant and it can prove that he didnt have inside information. If he had inside information then the stock would act a certain way after the report is issued - i.e., it would tank. It didnt. Why didnt it? Because the information was already discounted in th stcok price.

If you dont believe me simply call your local University and ask to speak to a professor in Finance, get a book on how the market works, or find something on the interent.

Again, anything that happened after the first few minutes of the reports release is completely irrelevant - see my discussion of efficient markets.

So, between the time right before the same and the time right after the report the stock did relatively little and basically moved on a slow downward trend.

[andyfox]

Love the way you graphed the stock market action.

The poster impersonating President Bush on this forum (BTW, I think he's very entertaining and I like it so much I usually refer to him as Mr. President) posted about Mrs. Kerry using her name to get a fire hydrant moved. I'm saying that compared to that shennanigan (I too love that word), Bush's career, including his involvement with Harken and the Texas Rangers, makes the fire hydrant issue look like nothing. That if the real President Bush wants to get into a character debate, looking at the ways either Mr. or Mrs. Kerry or Mr. Edwards has acquired their money, it will be to his disadvantage.

[Utah]

The poster impersonating President Bush on this forum (BTW, I think he's very entertaining and I like it so much I usually refer to him as Mr. President)
I dont think he is an impersonator. That is why I also refer to him as Mr. President.

shennanigan (I too love that word)
There was a hilarious South Park episode recently where the boys were being scammed by a carnival game and Kyle goes, "I declare shennanigans!". The police officer heard him and said, "did I hear correctly that you are declaring Shennanigans?". Kyle - "yes". Officer, "alright everyone. We have shennanigans". I about died laughing.

Bush's career, including his involvement with Harken and the Texas Rangers
I dont like mixing events and I prefer to analyze one issue at a time. However, what dont you like about Bush's dealing s with the Rangers? He certainly traded in on his name, but that had a lot of value.

makes the fire hydrant issue look like nothing
it was nothing and to point it out is silly.

That if the real President Bush wants to get into a character debate, looking at the ways either Mr. or Mrs. Kerry or Mr. Edwards has acquired their money, it will be to his disadvantage.

Nah. Kerry screwed his comrads over hard. I cant think of a case where Bush did.

[Rooster71]

[ QUOTE ]
The last 5 years has shown that auditing is complete B.S. and that there is no oversight.

Audit companies, like KMPG that I worked for on the consulting side, used the audit side to strike super rich consulting deals. Do you think they would ever say anything to piss off their clients. Example, I believe Andersen made $100 million a year in consulting revenue from Enron.

The board of director situation was also a major joke. One of my first jobs in strategic planning was to create the presentations for senior management to give to the board. We would lie our asseses off to protect the senior management from any board wrath. The board can truly be in the dark. The board also didnt really care. We had the CEOs from Coca Cola, 3M, etc. on our board. Do you think these guys were going to really look at anything? F*** no. It was all just a lucrative ego trip: fly in on private jet, go to a few hour meeting with other big honchos, get a huge stock and cash deal, etc.

[/ QUOTE ]
I agree that there has been little to no oversight of the audit process in recent years. I also agree that the whole BOD structure if a scam. In some cases, even upper management is clueless.

That is the reason some people don't invest in the stock market. But, as another poster suggested, if you don't trust the stock market, then you're a socialist! I beg to differ.

[Rooster71]

[ QUOTE ]
Did you examine Utah's chart? It appears to me that Harken eventually tripled in price after the sale do the Harken-Andarko partnership which I believe was initiated after Bush's sale.

[/ QUOTE ]
This is some really interesting logic! If someone is accused of insider trading and the price of the stock eventually goes up at a later date, then the accused person must not be guilty.

[Utah]

You miss the point. If a stock doesnt move when information is released then it cant be inside information by definition. If you look at the stock chart you will see that the stock did not move immediately after the report.

I am not sure what you dont understand?

[Utah]

The market still works relatively well. The distrust of boards is already reflected in the prices. Again, the efficient market theory. However, if the markets were fully trustworthy the entire market would rise and all investors would win.

[Rooster71]

The problem is an insider selling stock using information that Joe Public does not have.
This is only a question at this point. There is zero evidence at this point to say he did, only some potentially suspicious looking stuff.

What makes you think Joe public didnt have the information? The stock price action before his sale clearly indicates that the public did have the info. The stock action when he announced the sale indicates the public had the information. The stock action after the release of the report indicates the public had the information. The fact that the lawyers, consultants, people within Harken knew the facts indicate that the public had the information. The state of the industry was public. etc...etc...etc. He didn't file the necessary papers, which cast a doubt on when the notice of his "intention to sell" actually occurred. Funny that you mention his lawyers, even they told him not to do it.

he reason people bring up the fact that he was on the audit committee is that he had knowledge of the poor performance that was to be shown in upcoming financial statements.

Maybe. Lets even say this is true. What makes this inside information? A public company is constantly talking to the investment community. For your assertion to be true then Harken must have conspired to hide information from the investment community. That is nonsense. Trading on info that the insider has, but the public doesn't is insider trading. Please point to any investor lawsuits. This is really funny. What investors were going to sue? His daddy's Harvard buddies? He made a private sale, he didn't dump the stock on the open market. They were the ones supposedly harmed. Did they sue?

Why is it that the pro-Bush crowd always wants to change the subject?
Nobody is changing the subject. Just because I am challenging your assertions does not mean that I am pro-Bush . I suggest you keep your emotions out of it and hatred for Bush out of it and try and look at the facts. Yes, it's true that I don't like Bush. However, I don't think it's unfair to have Bush held to the same level of scrutiny that Clinton was.

He used inside information to dump stock to a third party who had ties to the family and didn't file the necessary paper in a timely manner. That's the point.

First, and again, you have provided ZERO evidence that he had inside information. It appears you are using a, " Damnit! I know he did it!" argument and you refuse to look at the facts. This last statement is telling how clouded your judgement is. Where he put the proceeds has zero bearing on anything - but boy does it sound so conspiratorial to say "third party with ties to the family". Also, the fact that he filed the paperwork late means nothing. Please tell me how this plays into anything. Was the sales not known. What did it supposedly coverup? I could say the same thing about your judgement being clouded. I wouldn't even care about this if the facts had actually been investigated and he was cleared, but they weren't and he wasn't.

You have not provided conclusive evidence that he hadn't acted illegally. But, a person is innocent until proven guilty, so I'm obviously on the short end of the stick here.

So again, all I ask is that Bush is held to the same level of scrutiny as Clinton.

[Rooster71]

[ QUOTE ]
The market still works relatively well. The distrust of boards is already reflected in the prices. Again, the efficient market theory. However, if the markets were fully trustworthy the entire market would rise and all investors would win.

[/ QUOTE ]
I agree, that would be true for the overall market (basic economic theory). To extend on that:
if the markets were fully trustworthy the entire market would rise and all investors would win. They would rise in the short run, until equilibrium is reached.

[Utah]

The problem is an insider selling stock using information that Joe Public does not have.
This is only a question at this point. There is zero evidence at this point to say he did, only some potentially suspicious looking stuff.

What makes you think Joe public didnt have the information? The stock price action before his sale clearly indicates that the public did have the info. The stock action when he announced the sale indicates the public had the information. The stock action after the release of the report indicates the public had the information. The fact that the lawyers, consultants, people within Harken knew the facts indicate that the public had the information. The state of the industry was public. etc...etc...etc. He didn't file the necessary papers, which cast a doubt on when the notice of his "intention to sell" actually occurred. Funny that you mention his lawyers, even they told him not to do it. Doesnt really matter. The stock did not move on his sale. The stock did not move of the news. ergo, no insider information. Also, my understanding is that the lawyers warned him. I worked with corporate legal a ton and they warn you about stuff 100 times a day. Its their job

he reason people bring up the fact that he was on the audit committee is that he had knowledge of the poor performance that was to be shown in upcoming financial statements.

Maybe. Lets even say this is true. What makes this inside information? A public company is constantly talking to the investment community. For your assertion to be true then Harken must have conspired to hide information from the investment community. That is nonsense. Trading on info that the insider has, but the public doesn't is insider trading.
Reread. I am not commenting here on whether he committed insider trading. I am simply saying that Harken had to conspire as well

Please point to any investor lawsuits. This is really funny. What investors were going to sue? His daddy's Harvard buddies? He made a private sale, he didn't dump the stock on the open market. They were the ones supposedly harmed. Did they sue? so, now there is less of a case then before

Why is it that the pro-Bush crowd always wants to change the subject?
Nobody is changing the subject. Just because I am challenging your assertions does not mean that I am pro-Bush . I suggest you keep your emotions out of it and hatred for Bush out of it and try and look at the facts. Yes, it's true that I don't like Bush. However, I don't think it's unfair to have Bush held to the same level of scrutiny that Clinton was. As I have always said, let there actions both stand on their own merits

He used inside information to dump stock to a third party who had ties to the family and didn't file the necessary paper in a timely manner. That's the point.

First, and again, you have provided ZERO evidence that he had inside information. It appears you are using a, " Damnit! I know he did it!" argument and you refuse to look at the facts. This last statement is telling how clouded your judgement is. Where he put the proceeds has zero bearing on anything - but boy does it sound so conspiratorial to say "third party with ties to the family". Also, the fact that he filed the paperwork late means nothing. Please tell me how this plays into anything. Was the sales not known. What did it supposedly coverup? I could say the same thing about your judgement being clouded. I wouldn't even care about this if the facts had actually been investigated and he was cleared, but they weren't and he wasn't.No you cant as I dont have a horse in this race. I saw the story and thought it was interesting. I reviewed it and saw there was no evidence. I am not pro Bush. I also looked into what I could find on the SEC investigation. I went to one of the hate Bush links in this thread. The SEC commented that it was investigated and there was nothing there. Again, this was on a hate Bush site. What evidence is there that it wasnt investigated properly?

You have not provided conclusive evidence that he hadn't acted illegally. But, a person is innocent until proven guilty, so I'm obviously on the short end of the stick here. Not neccessarily. We can draw our own conclusions even if not proven in court. I just dont see a shred of real evidence here. Given, the stock price movement I think its impossible.

So again, all I ask is that Bush is held to the same level of scrutiny as Clinton. again, let Bush's actions stand on their own merit. If it deserves further investigating investigate. Dont do it because of Clinton. Thats plain silly.