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URL:  https://boards.fool.com/whistleblower-exposes-insider-trading-program-at-33613065.aspx

Subject:  Whistleblower exposes insider trading program at Date:  3/18/2008  6:08 PM
Author:  FourthAxis Number:  36289 of 631

I'm still trying to wrap my head around all of it, but...I know I love some WikiLeaks!   http://wikileaks.org/wiki/Whistleblower_exposes_insider_trading_program_at_JP_Morgan

"Here's how it works:

1. An insider client transfers all or a portion of their company stock into a JP Morgan Securities Inc. brokerage account.

2. The insider then develops, in conjunction with the 10b5-1 team, a 'phased, pre-planned sales program to be executed at either market or

specified prices'.

3. Depending on the information available to the insider (but not the public), the insider can decide whether to execute the sale or not.

By gaming the system this way, JP Morgan teaches insiders how to use their knowledge to create a rigged market, one in which it is the "house" that always wins, and the small investor that always loses.

According to a statistical research paper published by Stanford's Graduate School of Business in September last year, executive 10b5-1 trades beat gains relative to non 10b5-1 executive trades by more than 500%."

 


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