More Insider Trading Alleged re: "Inside Wall Street" BusinessWeek Column
According to this Dow Jones newswire story, David Pajcin, also known as Jeff, has been accused of making insider trades based on prepublication copies of BusinessWeek magazine's "Inside Wall Street" column, according to a criminal complaint brought by the U.S. Attorney's office in Manhattan that includes charges of conspiracy to commit securities fraud and 10 counts of securities fraud.
“Prosecutors allege in their complaint that Pajcin made improper trades in 10 companies between November 2004 and March 2005, including shares or options of TheStreet.com Inc., Alltel Corp. and Arbitron Inc. 'Pajcin purchased all 10 of the IWS [Inside Wall Street] stocks earlier on the same day that the IWS column became public after the close of the markets,' an FBI agent who reviewed his trading records said in the complaint. 'The records also indicate that on either the day following publication of the IWS column or in after-hours trading on the same day that the column was published, once the IWS article had become public and the article had had an impact on the IWS stock prices, Pajcin sold each of the IWS stocks.' The magazine, which is owned by McGraw-Hill Cos (MHP). (MHP), is made available to the public after 5 p.m. Eastern on Thursdays on its Web site and is available on newsstands on Fridays. Positive news about a company in the column can push that company's stock higher in trading on Fridays.”
After several prior cases involving individuals trying specifically to profit from advanced information on the “Inside Wall Street” column, one would think that people would learn that trading on non-public information simply does not pay, especially when the information is shortly thereafter published in such prominent publications as BusinessWeek. When will people learn the lessons of other fraudsters who have attempted to profit from such market-moving information? What drives people to repeatedly commit such alleged fraudulent acts like what has been alleged above? If one has any thoughts, please feel free to add them to the comments below.