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Steven Cohen Appears Oblivious to Insider Trading Law


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Guest longinvestor

Great to see this. I do hope that the Fairfax lawsuit and the discovery there is the proverbial last nail in this guy's coffin.

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"So your understanding of the SEC rules on trading on inside information is that they do not preclude unequivocally trading while in possession of [material, nonpublic information]?” Bowe tried again.




Bowe then asked Cohen how he would handle getting a hypothetical e-mail revealing that a reporter was about to publish a negative story on a company he wanted to short.


After a palpably long pause, Cohen answered: “If the story was not coming out in a relatively short period of time, I would say there was ambiguity on that. I think it might be OK.”


As I understand it, if it's material and nonpublic but doesn't come from a relationship between the insider and investor, it's not illegal insider trading. Journalists aren't insiders, thus no insider trading. If the story is false there could be libel, fraud and conspiracy though.


Not defending SAC of course, it's pretty clear that illegal insider trading was part of their business model.

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