Pssst. Want a good stock tip? Check with the insiders. NOT the insiders whose “tips” can get you thrown into jail, mind you… #-ad_banner-#When most people think of insider trading, they think of an example like Martha Stewart, who famously became embroiled in an insider trading scandal involving the former ImClone Therapeutics. Stewarts’ mistake? Acting on the proverbial tip from a broker, Stewart dumped her shares of the biotech company a day before the public learned that the FDA had not approved ImClone’s experimental cancer drug. (For his part, ImClone founder and CEO Samuel Waksal was arrested in 2002 on… Read More
Pssst. Want a good stock tip? Check with the insiders. NOT the insiders whose “tips” can get you thrown into jail, mind you… #-ad_banner-#When most people think of insider trading, they think of an example like Martha Stewart, who famously became embroiled in an insider trading scandal involving the former ImClone Therapeutics. Stewarts’ mistake? Acting on the proverbial tip from a broker, Stewart dumped her shares of the biotech company a day before the public learned that the FDA had not approved ImClone’s experimental cancer drug. (For his part, ImClone founder and CEO Samuel Waksal was arrested in 2002 on insider trading charges after instructing friends and family to dump ImClone shares before the FDA decision was made public. In the end, Stewart didn’t face insider trading charges but did serve five months in prison on related findings.) No, I’m referring instead to company insiders – officers, directors and holders of large blocks of stock who are required to report stock transactions involving their company to the U.S. Securities and Exchange Commission (SEC), which in turn makes those transactions public. You see, especially when it comes to insider buying, there’s evidence to suggest it can pay off for investors who… Read More