I want to insider trade or I'll sue
I was going through the stack of newspapers that accumulated while I was on vacation and on the front page of The Charlotte Observer was the headline "Cameron Harris sues Wachovia". Since his family sold their insurance company to First Union, Wachovia's predecessor that's big news here in Charlotte. Friends just don't sue friends in Charlotte, bless his heart.
His suit claims that while on a hunting trip with Ken Thompson, Wachovia's then CEO he pumped Mr. Thompson for information about what was really going on in Wachovia. He asserts Ken Thompson's failure to give him what would have been unpublished insider information caused him to keep his stock and incur a large financial loss.. He might have gotten out at $55 instead of riding it down to what ever he owns now. He and his family owned around a million shares so the pony ride down cost him some real dough.
I'm no legal genius but if Ken Thompson had told him about what was really going on and he sold his stock before the swan dive wouldn't he be guilty of insider trading? Wouldn't both he and Ken Thompson be eligible of a free trip to Club Fed down at Ft. Walton Beach, Florida? Hasn't he heard of Martha Stewart.
We all remember how Martha acted on a tip from her friend Sam Waksal and did some time for insider trading. Her trade only gained a few hundred thousand, Cameron Harris' gain would have been around 50 million.
This is a suit I'll have to follow. Can you really sue for failure to receive and act on insider trading information?
Jim Van Meerten is an investor and blogs on financial matters at Financial Tides. Please comment below or email to FinancialTides@gmail.com
Disclosure: I am a former employee of Wachovia and have family members working for Wells Fargo and they have an interest in Wells Fargo stock and vested and unvested stock options.