Forum Archive Index - June 2000

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

Nigel,

Your comments are well thought out, but I will try to clarify what I meant
to point out.
Charts show all types of information.  Look at say Frontier.  In December
FRO jumped to 40C then fell back to 25, six months later they become RMG.
Now someone seeing the increased activity in FRO may then take the belief
that something is "going on" and then trade on a 5 to 7 cent margin taking
their profit but benefiting from the increased activity caused by the
insider trading. So any body who uses volumes and price movements as
indicators is therefore benefiting on insider knowledge if this was not
acted upon the charts would show nothing significant occuring.  My other
point was exactly what you pointed out you can not judge someone with only
considering one perspective, which is exactly what people are doing by
condeming Hoggard.  I will leave the topic with this.  Mr Hoggard may have
committed insider trading, but can anyone be sure he did it intent.  Oliver
is right in saying that whether intentional or not he should pay financially
but should he have his name drawn through the mud by people and journos' who
really have no idea.

James Lee
Direct Broking.

-----Original Message-----
From: Nigel Bree [mailto:nbree@kcbbs.gen.nz]
Sent: Friday, June 16, 2000 11:14 PM
To: sharechat@sharechat.co.nz
Subject: Re: [sharechat] Fletchers and Insider Trading


James Lee wrote:
> Every single trader is relying on insider information

Nonsense. Those with no connection to the insiders are *not* relying
on non-public - insider - information.

> it is inevietable that some people in the old boys
> club will know something you or I won't.

Perhaps they may know something. The question lies in whether they
choose to use that unfairly gained advantage at the expense of others.

Given the way that NZ's elite like to portray wealth and status as flowing
from their moral rectitude (or other way of portraying themselves as
deserving of their privilege), it would be nice to see that hypocrisy
exposed more often.

> Traders rely on statistical measures to see patterns in the movements of
> share prices.

That is not insider information - it relies on data which may be purchased
by anyone with the wherewithal.

> They are therefore reacting to someone with more knowledge than
themselves.

Insider information is *not* the same thing as other differences in levels
of knowledge, despite your attempts to conflate them. Insider information is
*not* available to anyone.

> No market is free of insider trading [...]

Your point being what? "Everyone else does it" is hardly a particularly
good defense of unethical behaviour, nor a reasonable argument for not
making any efforts to reduce the amount of insider trading (or business
fraud in general).

> Trading via his companies broker on his own account does not indicate
> insider trading.

But a director trading the day between a major decision by the board and
the public announcement *is* an unambiguous indicator of 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

Perhaps. On the other hand, they might (quite reasonably) also see the
fact that he did in fact commit insider trading as emblematic of a
corrupt system, and wish to make an example of him in an attempt to
discourage others.

> What you need to do Oliver is to examine both sides before forming an
> opinion and before judging someone, read below for an example.

Cute, but very silly. All that your example demonstrates is how one can
distort facts by being selective with evidence and framing its
presentation (as we're all familiar with from corporate PR).

- Nigel



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