Did any government agency (like the SEC) investigate whether the attendees

[JDPriestly]

at Cheney's secret meeting with energy industry leaders at the beginning of the Bush administration engaged in insider trading based on the discussion at that meeting?

Seems to me that executive privilege should not be invoked to prevent the investigation of a crime unless that privilege is absolutely vital to national security.

Obviously that meeting was not vital to national security.

Seems to me that all attendees at secret government meetings should subsequently be investigated for insider trading based on the content of the discussions at the meeting.

Can you imagine what that might mean if applied to defense industry insiders and government agents including White House staff, their friends and members of Congress and their friends and family.

I know that members of Congress have to make their financial holdings public -- but that, in this day and age, is probably not enough.

Is there something I don't understand or know about all this?

[Trillo]

1. SEC are the first three letters of the word secret.

You probably knew that though.

bump.

[badtoworse]

2. The fact that a person may have inside information is not grounds for an investigation.

Thousands of people in the banking business acquire inside information every day. Senior people in public companies (and sometimes not so senior people) receive inside information regularly. They are expected to know and follow the law as it relates to trading on the information.

Just because you are in a position to commit a crime does not mean you should be investigated for one. There needs to be a bona fide reason to believe a crime was committed before an investigation is warranted. That same reasoning applies to insider trading.

I might add that in the banking and related businesses, senior people and anyone who is in a position to potentially have inside information (that's virtually everyone) is restricted on making any trades. Approval (which is good only on the day it is granted) from Compliance is required to execute any transaction in your own account or one owned by a close relative.

[JDPriestly]

3. True, but were the people who met with Cheney restricted

in any way?

[badtoworse]

5. They are restricted by the law

Trading on inside information is illegal regardless of who does it.

Banks have additional restrictions to protect their reputations and client relationships. As an example, suppose an investment bank is advising a company on a possible acquisition of another company. How do you think it would look if an executive at that bank were discovered buying the stock of the target company? Aside from the criminal aspects, the damage to the bank's reputation would be huge. That's the reason why banks restrict their employees' trading activity.

Ordinary people are also legally barred from insider trading. Remember Martha Stewart? She was convicted of insider trading even though there were no restrictions (as far as I know) on her accounts. The same thing could happen to you - Let's say the executive in the example above were your uncle at Goldman Sachs; he gave you the information and you bought the stock. Both he and you would be breaking the law. You should also know that the Securities and Exchange Commission examines stock trading looking for unusual patterns or levels of activity preceding the public announcement of market sensitive information such as mergers, bankruptcies, etc. Insider trading is nothing to screw around with - people can and do get caught.

As for the executives, it is likely that their companies have restrictions on their trading, but probably not as stringent as what a bank might require.

[JDPriestly]

6. But, since only those who attended the meeting know what was said

or discussed during the meeting, how would anyone know whether insider trading occurred unless that issue is investigated?

I think when secret meetings of that sort are held in the offices of government officials who set policy, the danger of insider trading based on and following the meeting is always imminent if no report of the subjects discussed in the meeting is published.

I think we need a federal open meeting law.

[badtoworse]

7. A federal open meetings law is an entirely different matter

While it has some positives, I don't believe it should apply to every meeting. There are matters that government officials cannot candidly discuss in a public forum. Who would make that call? Who would enforce it? I don't think it's practical.

[JDPriestly]

8. The California law includes exceptions for specific topics such

as personnel matters. The California law is really great.

[slipslidingaway]

4. No sense looking back, just look forward :( ...

I do know that the stock market bottomed the exact day Congress voted to invade Iraq.