NickStone_IHB
New member
<p>I haven't posted for a while, but this one REALLY PISSED ME OFF!!!!</p>
<p>I was honestly wondering how Mozillo was gettting away with making press statements talking about the "future dominance" of his company, and then turning around the next day and exercising his stock options (around $10) to sell them immediately (for around $40).... thus far he has made over 122 Million dollars. Now, they BURNED the boys over at Enron for this... in fact, the thing that killed Skilling was video footage of him telling the employees to keep their 401-K's invested in one stock only - ENRON - while privately dumping his stock. So why is Ken Skilling avoiding picking up soap in the shower while Mozillo is obviously spending far too much time in a tanning booth (if you don't believe me - check out his recent photos)</p>
<p>Well... thank the dear old SEC for this little chestnut. Welcome to the world of 10b5-1.</p>
<p>Essentially it works like this. If you buy or sell stock / options based upon information that no one else has - you are guilty of insider trading. HOWEVER, if you happened to enter into a written plan to purchase options to buy/sell the stock before you had the insider information, then you aren't breaking the law by exercising your option. </p>
<p>"So?" you might ask.... so where is the scam?</p>
<p>In the loophole of course. YOU DON'T GO TO JAIL FOR CANCELLING AN OPTION BASED UPON INSIDER INFORMATION, SINCE A PURCHASE / SALE NEVER TOOK PLACE, THUS, NO CRIME. For those of you out there with criminal minds... I am sure you already have the answer. But for you honest people out there, I will explain.</p>
<p>If you are Mozillo, you purchase multiple sets of stock options (laddered) that are set to expire at specific time intervals (Say every 2 months). You keep doing this over and over again.... making the option term long enough to cover your ass. By private agreement (the one the SEC doesn't get to see) you have a specific limit on how many options that you get to cash in. Then, while the going is good, you just keep cancelling options. (no crime there). But of course, when it is time to EXIT STAGE LEFT (like now), you suddenly decide to exercise your options and bail out. (Surprising that Skilling didn't think about this, but he had bigger worries than insider trading). </p>
<p>Since the option was initiated a long time ago, there is no basis for insider trading!!!!!</p>
<p>Clever bastard.</p>
<p>I was honestly wondering how Mozillo was gettting away with making press statements talking about the "future dominance" of his company, and then turning around the next day and exercising his stock options (around $10) to sell them immediately (for around $40).... thus far he has made over 122 Million dollars. Now, they BURNED the boys over at Enron for this... in fact, the thing that killed Skilling was video footage of him telling the employees to keep their 401-K's invested in one stock only - ENRON - while privately dumping his stock. So why is Ken Skilling avoiding picking up soap in the shower while Mozillo is obviously spending far too much time in a tanning booth (if you don't believe me - check out his recent photos)</p>
<p>Well... thank the dear old SEC for this little chestnut. Welcome to the world of 10b5-1.</p>
<p>Essentially it works like this. If you buy or sell stock / options based upon information that no one else has - you are guilty of insider trading. HOWEVER, if you happened to enter into a written plan to purchase options to buy/sell the stock before you had the insider information, then you aren't breaking the law by exercising your option. </p>
<p>"So?" you might ask.... so where is the scam?</p>
<p>In the loophole of course. YOU DON'T GO TO JAIL FOR CANCELLING AN OPTION BASED UPON INSIDER INFORMATION, SINCE A PURCHASE / SALE NEVER TOOK PLACE, THUS, NO CRIME. For those of you out there with criminal minds... I am sure you already have the answer. But for you honest people out there, I will explain.</p>
<p>If you are Mozillo, you purchase multiple sets of stock options (laddered) that are set to expire at specific time intervals (Say every 2 months). You keep doing this over and over again.... making the option term long enough to cover your ass. By private agreement (the one the SEC doesn't get to see) you have a specific limit on how many options that you get to cash in. Then, while the going is good, you just keep cancelling options. (no crime there). But of course, when it is time to EXIT STAGE LEFT (like now), you suddenly decide to exercise your options and bail out. (Surprising that Skilling didn't think about this, but he had bigger worries than insider trading). </p>
<p>Since the option was initiated a long time ago, there is no basis for insider trading!!!!!</p>
<p>Clever bastard.</p>
