U.S. lawmakers will soon face the same explicit ban on profiting from inside information as other investors. According to Yahoo the Senate on Thursday sent a bill saying as much to President Obama, and the president has said he will sign it.
That closes a loophole, but securities laws hold others. For example, corporate insiders whose companies are about to be bought by rivals are forbidden from buying shares ahead of time to profit from the price jumps that takeover announcements often bring. But they accumulate plenty of shares just the same, according to a study slated for publication in the Journal of Corporate Finance.
That’s because company managers are often paid partly in stock. Many sell these shares at regular intervals, whether to use the cash for other purposes or to keep their personal assets from becoming too concentrated in a single stock. For this reason, managers who decline to buy their companies’ shares ahead of takeovers may nonetheless accumulate them if they also halt their typical selling. That’s just what they seem to do…..
Find out more at http://finance.yahoo.com/news/an-insider-trading-loophole-congress-didn%E2%80%99t-close.html
No comments:
Post a Comment