SEC FILES AMENDED INSIDER TRADING COMPLAINT – BARAI CAPITAL MANAGEMENT AND
The Recent Insider Trading Raids
Published: 2011/02/08Posted in: Insider Information
Insider Information Archive
Public Data from the Exchanges, Part 3
Published: 2010/05/31Posted in: Financials, Insider Information, Options, Short Selling, Stocks
Today we review the data available from three New York exhanges with restrictive linking policies: NSX, NYSE, and NASDAQ. NSX and NYSE do not permit linking directly to any part of their web sites without prior written permission. NASDAQ permits linking only to their front page without other authorization.
- The National Stock Exchange (http://www.nsx.com) has a policy which prohibits any and all hypertext linking to their web site without prior written consent. They don’t have a lot of data series publicly available at this point, but you can find their daily short interest archives on their web site without registration. With free registration, they also provide some volume and pricing historical information on ETFs traded on their exchange.
- NASDAQ prohibits linking to any of its pages (other than its front page) without prior written permission, but they offer a tremendous wealth of data, including:
- Quotes, both real-time and historical (up to 10 years)
- After-hours and pre-market quotes (realtime)
- Options quotes
- Analyst estimates
- News
- Technical indicators (with StockConsultant)
- News
- Financial variables from SEC 10-K (past four years) and 10-Q (past year) in XBRL
- Short sale information, updated twice monthly
- Institutional and insider trading information
- Competitor information
- Transcripts from earnings calls, conference calls, and the like
NASDAQ also operates an anonymous ftp site on which it files data per regulatory requirements (short selling and threshold securities) and for other purposes at ftp://ftp.nasdaqtrader.com/. Sometimes it is hard to access it, perhaps due to high demand.
- The New York Stock Exchange sells detailed market data through their web site, NYSE Technologies (http://www.nyxdata.com/), but they do make some information available for free on their main corporate web site (http://www.nyse.com/), including:
- Summary information for listed securities
- SEC filings, with an increasing number of tables in spreadsheet format
NYSE also operates an anonymous FTP site for regulatory compliance and other purposes at ftp://ftp.nyxdata.com/. It contains short sale information for ARCA securities and other data. Access to it is a bit patchy during some times of the day, perhaps due to high demand.
Stay tuned for part four in this series: data from OTC exchanges.
Insider Trading
Published: 2010/05/05Posted in: Insider Information, Top Level
Making a securities sale on the basis of privileged information is flatly illegal. A variety of defenses exist for certain similar yet ethical practices, so the regulatory line between lawful and illegal behavior is a bit fuzzy. Ethically, if on the basis of privileged information an insider thinks his stock is worth less than his selling price, he shouldn’t be selling it.
It’s easy to think of examples of both lawful and illegal insider trading. If the CEO of a publicly traded company happens to know that his company is about to go bankrupt, and that information is not yet public, and he reasonably expects the share price to be devastated, selling his shares on the basis of that information would be a serious crime. But if his company were healthy, and he had previously calculated using a pricing model that the price of his company’s stock had risen too high, and the information on which he based his decision were public, he would have legal justification to make sales (with the right documentation).
It’s pretty clear, though, that there is unfortunately still a grey area in the regulations permitting insiders to make sales with greater acuity than the average investor without being penalized. In addition, insider purchases are somewhat less strictly regulated than sales.
The SEC requires directors, officers and beneficial owners of publicly-traded companies to file SEC Form 4 when making a trade of most classes of securities of their respective companies and both SEC Form 144 and Form 4 when making sales. Watching insider trades can be highly informative.
Substantial personal investments by officers and directors are often followed by extremely favorable quarterly reports. Large quantities of inside sales sometimes indicate that a security has become overvalued.
It should be pointed out that some insiders place purchases in an attempt to drive up the price of their company’s securities. In particular, if insiders place small purchases, look for signs of an attempt to drive speculation. There’s a big difference between investing the equivalent of 2 weeks of CEO pay and investing one’s entire life savings.
While insider sales do not necessarily mean that the stock is overvalued, sudden, large-scale inside sell-offs are justly regarded with suspicion; they may even indicate that something nefarious is afoot.
- The SEC EDGAR database is likely the most up-to-date source of insider trading information, but it will not require standardized data formats until 2011. In the meantime, filings there may be listed in free-form text and/or HTML formats.
- Yahoo! provides two years of insider trading data for individual securities.
- Insider-monitor.com provides insider trading data in chronological tabular format.
The viewpoints expressed in this post are strictly opinions and should not be taken as investment advice.
Artwork copyright information found at Wikimedia Commons
