Submitted by Daniel Drew via Dark-Bid.com [4],
Over the years, Martha Stewart has become quite familiar with securities laws.
In 2004, she was found guilty of obstruction and making false statements [5]
after being charged with insider trading. In that case, she sold
ImClone stock before the company announced negative news. Now, The Wall Street Journal [6]
reports that Sequential Brands Group is in talks to buy Martha Stewart
Living Omnimedia. The stock surged 26% today after the report.
A review of Martha Stewart's trading history [7] shows that she has been steadily selling stock in the company over the past year. Every month, she sells 83,333 shares.
[8]
However, she halted this selling program in February of this year.
[9]
Now, 4 months later, we see the buyout report.
[10]
It looks like the "Chief Creative Officer" has finally learned how to use non-public information effectively.
You can't get in trouble for trades you don't make. Since she is
already a shareholder, all Martha had to do was sit on her hands.
However, stopping her monthly selling program helped increase her gains.
You can call it a loophole, or you might say it's no big deal. But one
thing is for sure, the next time you see an executive, particularly a "Chief Creative Officer," stop their monthly sell program, consider it a green light [11].