Grifco Inc (GFCI)

[10 bagger]

Inside information..

I once had a partner in a firm that had power of Att.. over several accounts and was long a substantial amount of shares in a company,, As underwriters all of us were in the same position.. This partner started selling the shares of his clients out hitting bids that started as high as $11.00 per share and sold out all his clients before the stock hit $8.00..

We all watched this happen and as I ran the trading desk at this time my position in the stock continued to increase... When he had sold out all his clients he made it known to the rest of us that he was suing the company and because he had inside information he never sold a share.. We bought him out and he did sue..

The NASD got involved but the clients that he sold out of the stock were able to keep all funds intact from the sale.. Others that sold in the normal course of business that did not have knowledge of the suit kept all funds intact but one partner that sold his own shares after receiving information of the suit before it was announced was not only fined but was suspended for 60 days by the NASD...

Insider information is LEGAL to have.. act on that information prior to public dissimination is the gray area and the SEC and the NASD will always come down on the side of the injured investor..

Martha Steward's case was different than most because it was a he said,,, she said and she was put in prison for the lie and not the sale... If she had not lied would the sale been inside information.. Only if she had knowledge that the source came from an insider,, If the broker told her to sell with out revealing his source she was then not acting on insider information at all but the advice of her broker... If one passes on insider information as such and the person acts on it as such ,, that person is at risk of insider information actions.. If a printer has an account at a brokerage firm and always seems to make the right trade before a press release,,, is then touted by his broker and the broker has knowledge of where his information comes from,, causing others to trade and make money who is trading on inside information..?? In this case it is the printer,, the broker and all that had knowledge that he was a printer and acted upon it.. If the broker stated that he was making a reccomendation of the charts or stars there is no liability to the one's that purchased the stock off the advice of thier broker..

Insider information stops when the person that buys or sells,,, does so without any knowledge of why,,, other than an investment decision...hank