Forum Archive Index - June 2000

[James Lee <James.Lee@directbroking.co.nz>]

Oliver,

 

Every single trader is relying on insider information, it is inevietable that some people in the old boys club will know something you or I won't.  Traders rely on statistical measures to see patterns in the movements of share prices.  They are therefore reacting to someone with more knowledge than themselves.   You are right in one instance, that I do not rely on such information to trade myself and would rather make an informed judgement on information freely available even if it requires a phone call to Australia to talk to the companies CEO, research Oliver will beat trading 9 times out of ten.  No market is free of insider trading save maybe Canada where brokers really don't like people trading.  If an insider was to commit insider trading all they have to do is open a company name with a few solicitors as the main directors.  Open it in say the Cooks, set up a internet account then process the transaction via a third party broker.  Trading via his companies broker on his own account does not indicate insider trading.  Many people who wish to punish Kerry  are your simply jealous traders who can only dream of having the money Mr Hoggard has ( Not Aimed at you).  You mention stupidity, well no one questions that the act was stupid or lazy, a chairman should check if an announcement was released.  But surely Mr Hoggard knew about the hiving off, months before announced so why perform the trade the day before. 50K is not worth the risk of losing your integrity to almost anybody and certainly not to Mr Hoggard.  What you need to do Oliver is to examine both sides before forming an opinion and before judging someone, read below for an example. No one is disputing the Mr Hoggard was wrong or that should have returned the profits but surely one must examine the circumstances before claiming that Mr Hoggard is a lying cheat as that Oliver is defamation of character.

As to your question pertaining to our practices, you will have every opportunity to read the stock exchanges findings after they perform  their examination.

Best of luck

James Lee

Direct Broking.

-

Question 1: If you knew a woman who was pregnant, who had 8 kids already, >

three who were deaf, two who were blind, one mentally retarded, and she >

had syphilis; would you recommend that she have an abortion?

Read the next question before scrolling down to the answer of this one.

Question 2: It is time to elect a new world leader, and your vote counts.

Here are the facts about the three leading candidates:

Candidate A: He associates with crooked politicians, and consults with

astrologists. He's had two mistresses. He also chain smokes and drinks 8 to

10 martinis a day. Candidate B: He was kicked out of office twice, sleeps

until noon, used opium in college and drinks a quart of whisky every

evening.

Candidate C: He is a decorated war hero. He's a vegetarian, doesn't smoke,

drinks an occasional beer and hasn't had any extramarital affairs.

Which of these candidates would be your choice?

Decide first, no peeking, then scroll down for the answer.

Candidate A is Franklin D. Roosevelt

Candidate B is Winston Churchill >

Candidate C is Adolph Hitler > >

And by the way: Answer to the abortion question -- if you said yes, you

just killed Beethoven.

Pretty interesting isn't it.

Makes a person think before judging someone

----Original Message-----
From: Oliver Shapleski [mailto:oliver.shapleski@vuw.ac.nz]
Sent: Thursday, June 15, 2000 5:52 PM
To: sharechat@sharechat.co.nz
Subject: Re: [sharechat] Fletchers and Insider Trading

James, I wonder, how much of his millions have been made by making $50k a day using insider information???  His millions came from somewhere and if the insider trading regime is as weak as present comment suggests, he wasn't risking any of his millions at all.  

 

Interesting point about intention: the legislation says nothing about intention being required.  If you have inside information and you trade, then you have prima facie breached the regulations.

 

Perhaps I'm just harsh, but IMO there is NO WAY he could have mistaken the day that the announcement came out, and there is NO WAY he wasn't fully aware of the companies reulations on trading FLC shares.  If my memory serves me correctly, he didn't actually come forward s soon as the "mistake" was realised and say: "oops, silly me, what a doofus, look what I did".  I thought he changed his story once or twice until he found one plausible enough for some people to accept.  If that was an innocent mistake then I can't believe he still has a job somewhere for total stupidity.  If it was not an innocent mistake, then I can't believe he still has a job for total lack of integrity. 

 

And as for causing little harm, well... if you consider the complete undermining of and disdain for the SE rules to be little harm, then you probably either (a) don't have any shares in the market, or (b) aren't a small time investor who relies on the rules to save yourself from being exploited.  I certainly hope Mr Hoggard gets what should be coming to him and has to cough up as much as could possibly be required.  If the death penalty was an option I'd be fighting for it. 

 

James, what internal mechanisms does Direct Broking have in place to prevent the likes of Mr Hoggard buying shares like that?  Any at all?  (This isn't in any way an attack against you or brokers; just curious cos I know JB Were had the finger pointed at them after the whole affair was uncovered). 

 

Oliver

----- Original Message -----

From: James Lee

To: 'sharechat@sharechat.co.nz'

Sent: Thursday, June 15, 2000 5:53 PM

Subject: RE: [sharechat] Fletchers and Insider Trading

Gday

Has anyone actually thought if Mr Hoggard actually intended to do comitt insider trading.  Hoggard is a multi-millionare and it would seem totally bizarre that such a person would take trade under his own name for the possibility of 100k profit.  I would imagine his punishment will be on the slight side due to the very little harm caused.  A thought anyway.

 

James Lee

Direct Broking.

 

 

 From: Oliver Shapleski [mailto:oliver.shapleski@vuw.ac.nz]
Sent: Thursday, June 15, 2000 11:02 AM
To: sharechat@sharechat.co.nz
Subject: [sharechat] Fletchers and Insider Trading

Was delighted to see an article in the Post last night that said Stephen Franks and Roger Kerr are pursuing punitive penalties for Kerry Hoggard.  About time someone did!  I was disgusted last week when Fletchers said they did not consider taking further action as necessary.  How important is integrity to them?  How did you Fletcher shareholders feel about the company not going any further?

 

The company has a DUTY to shareholders under the SecAmendment Act to take actions on behalf of shareholders.  If I was a shareholder of Fletchers I would already have served a notice on the company myself requiring that Fletchers take further action.  Lost his chair and paid back the profits?  What sort of deterrent is that?  The whole point of 300% penalties is to act as a deterrent - who are the company to say that the loss of job was a sufficient one? 

 

I can't wait to hear how the High Court deals with this one - if there is ANY integrity in the process at all there is no way Kerry Hoggard will get out of there paying less than another $100k.  My question then is: who gets the $100k?  My understanding was that only the company can take the action, and that the moeny goes to the company to act as compensation for damage to reputation.  If Stephen Franks is leading the action to restore FLC's reputation (and I assume with his expertise he knows that he can), where does the money go?

 

Oliver