Comments

• The Mad Hatter

  2009-01-09 04:25:06

  The SEC has over the last 8 years been somewhat toothless. It will be interesting seeing if anything changes with the change of administration in the US.
  
  That said, I don't think that Microsoft is the only company doing this. Over the last 20 years I've noticed more businesses doing things that are legally questionable, and this seems to be a problem across a wide range of industries. It seems like the chase for profit has corrupted management.
  
  Of course this is only what I see. I know that the businesses in question will claim that they are acting legally, that everything they have done is proper, that they are only trying to protect shareholder equity, however it does not look like this to me.

• AlexH

  2009-01-09 08:35:29

  @Mad Hatter: in cases like this, which is insider dealing perpetrated by individuals, the SEC have generally had a decent track record.
  
  Institutional - and particularly multi-national - problems they've found harder, but then, they have a much better record than practically any other agency on earth because they reward tattle-tales with lenient treatment. See, for example, Enron, Virgin vs. BA, or any other numerous "big" frauds.

• Roy Schestowitz

  2009-01-09 08:41:15

  Even a Vice President at Microsoft was recently accused.
  
  Microsoft exec dumped stock prior to Red Ring announcement
  
  

  To make matters more murky, the sales were not registered with the Securities and Exchange Commission within the mandatory two days of the transaction, a result of an alleged "administrative error." Microsoft has since remedied the issue by following the "procedures required of late-filers."

  
  
  Microsoft's Bach sold more stock before Xbox news
  
  

  Microsoft Corp. executive Robbie Bach sold $3 million more in company stock during the period leading up to an announcement about a costly flaw in its Xbox video game console than previously reported, according to a filing Monday with the Securities and Exchange Commission.

  
  
  Insider Trading Hasn't Affect Microsoft Stock - Yet
  
  

  MarketWatch.com reports that Robbie Bach, president of Microsoft's Entertainment and Devices division, sold $6.2 million of Microsoft stock just prior to announcing that Microsoft was going to have to extend XBox 360 warranties to three years because of extensive failures. The filings note that this was not part of any scheduled diversification or selling program; this was a conscious, unscheduled sale by the guy in charge of releasing news that could affect the value of Microsoft stock.
  
  [...]
  
  Insider trading is a very serious violation of the law; just ask Martha Stewart, who served five months in prison for avoiding losses of $43,000 through trades that just had suspicious timing (no insider trading was actually proven). This is $6.3 million that went straight into Robbie Bach's pocket.

• AlexH

  2009-01-09 09:00:37

  @Roy: well, as your articles state, if he did it deliberately then they will catch him, because he has to register all his trades.

• Roy Schestowitz

  2009-01-09 09:10:57

  The SEC was asleep. I wrote about it extensively at the time and also addressed a a question at Bach (last week).

• AlexH

  2009-01-09 09:26:41

  Given they were the ones who found it, they were hardly asleep.
  
  What you mean is you wanted them to find him guilty.

• Roy Schestowitz

  2009-01-09 09:43:25

  I don't think he was ever investigated or acquitted. I watched it closely.

• AlexH

  2009-01-09 09:51:15

  Difficult to see how you would know if the SEC investigated him or not.
  
  Also, you can't be acquitted until you're actually charged with something, and Bach was never charged with insider dealing. Selling shares in the company you work for isn't automatically insider dealing.

• Roy Schestowitz

  2009-01-09 09:53:48

  Read the articles again, please.

• AlexH

  2009-01-09 09:56:24

  I've read the articles already, thanks. If you have a point, make it.