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Re: noreen post# 3780

Saturday, 10/14/2017 9:54:31 PM

Saturday, October 14, 2017 9:54:31 PM

Post# of 18220
Not an attorney - so really can only speculate. I also don't know if the legal standards are different for listed vs. non-listed companies.

Your questions depend on whether it is a criminal or a civil action....both are possible in cases of alleged stock fraud.

Have absolutely no idea if or how long trading would be halted...or even when...although it would probably coincide with the announcement of some sort of legal action...or when the company is notified that it is under investigation (Wells notice). Don't know where you might even find that information.

Who pays depends on the type of action and which parties are being sued -- assume that things are initially covered by insurance or SG&A.

If you obtained information through your own research - and not from anyone who could be considered an insider - or who obtained the info from an insider - then trading is probably okay because you simply put pieces together - it might fall under "mosaic theory.

Look at someone like Andrew Left who often finds questionable information, takes a position and then publishes his suspicions. He's not a sellside analyst, so his trading would not be considered front-running.

What happens to management or any party allegedly involved depends on their role and the nature of the fraud. If management is found guilty - worst case scenario, people get jail time (think Bernie Ebbers) in a criminal trial, at a minimum restitution in both civil and criminal cases...being banned from the securities industry, having a senior role at a publicly traded company....there are myriad potential remedies/penalties. Again who pays depends on court findings, the individual and their role.

The investigative and judicial process is a LONG haul (think multiple years - not weeks or months)