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FBN's Charlie Gasparino breaks down exclusive details on how the SEC might be looking to expand its interpretation of insider trading laws.
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Thanks so much recent remarks by none other than the SEC official that brought.
That rajaratnam case are causing a stir in the Wall Street -- -- community SEC looking to expand its interpretation of the insider trading laws and other violations.
Charlie Gasparino has exclusive.
I was not immediately but I I interviews three people that where.
And what they tell me this is if we have to put this in context this is not just any old.
SEC official this is Eric wrote David Rosenfeld he is the guy the brought garage case for the SEC and by the way.
It's the SEC not the US attorney that brought that case really and -- they -- up later he basically said that meetings between analysts.
And corporate executives paid lead to insider trading -- lead to violations of rule left the those meetings in of themselves he said he was surprised that they go on.
And basically said that those who meetings are maybe not in him themselves illegal.
But will certainly lead to illegality because company specific information will be disclosed.
It won't be disseminated broadly now this is a vast if it's true I'll point out wow -- it is a -- have to ask re interpretation.
Of all these laws as you know on Wall Street companies meet without us all the time there are one on one meetings with content where people provide -- clarification.
If the SEC is -- that that the view.
That these meetings are potentially illegal but they opened the door for illegality.
When then you've got a real problem audience in terms of you Wall Street firms you hedge funds you when the white collar bar in this country has to really did they re re re examine.
How things are being done I at a very basically we -- -- going out he made some interest earmarks.
Regarding expert networks remember these are exceeded the networks that are in the -- because -- provide company specific information to hedge funds -- major investors.
They often -- Company officials to given that information.
They are involved at some of the insider trading case as forgiving.
Inside information about those companies but guess what they also give lots of other information they give data they give broad insight he -- said.
He can understand why any corporation would allow.
There -- there executives to talk to an expert network and I should point out my wife was once solicited.
By an expert really.
It -- has no information about it but it's -- -- I'm not gonna follow other.
I do that question I don't I don't first part of -- just quickly get the SEC's -- and feel -- -- please SEC's basically saying that some his remarks taken out of context is insane.
Be careful in terms of the the beyond the expert network thing caffeine they say that he really meant that he can understand why corporation.
Allow yeah their eggs and that is that sense to me but the other one I think Christie both sides of the other issue is if you're talking about the analyst.
You know target people inside the company are having a CO on one hand if they're not allowed to do that.
There's so much less value to an analyst -- and analysts don't need it right on on so you know they should be allowed to do this on the other hand.
We do kind of get unique access inside -- an analyst calls a CEO calls -- morning and calls Jamie Dimon.
We don't want succumbed to something want to set specs and I'll tell you about his story right now it's.
Yes you see right now predict telling you were -- up.
We get a kick in when you see the number but unlike when -- -- accident shut up and and while so.
If I have I know I'm -- -- If the analyst.
Isn't allowed to go see you -- the CEO get back kind of color right.
A lot of -- value -- -- on the other hand average person would never have that kind of access I can kinda see the argument quite well it all.
It looks let's just look at it this way I mean the SEC is on a major care to level the playing field for all investors are we have to point out whether.
That is something they should really be spending a lot of time mine when we talk about real problems for investors is like getting ripped off by -- Bernie Madoff as opposed to someone.
Maybe have a little more insight into you about a specific stock.
That's the one -- this is visit this is an agency would have limited resources that this the financial crisis -- Madoff.
But -- very good at going after insider trading the other thing we have to we have to look at because you know business people watch a show.
If the SEC is re interpreting the law and despite what John Nester said if you were sitting in that audience that.
The I I spoke with very senior people.
Senior partners -- major law firms and people who work at the big banks in the general counsel's office and -- the at a senior level.
They really believe that the SEC is re interpreting.
How to deal with FDA and all these other issues that it's gonna basically say if you walk into a room if you have a private conversation.
It's basis in your opening the door do you legality and they're gonna go after that stuff this represents a huge headache I think for every Wall Street firm.
And that's why we -- value here at Fox Business because.
And I got to get this at the other place we're telling you right now.
You -- -- but a look at your compliance staff because it's pretty this is pretty if that is here it's that is huge star and a lot of questions about that -- call we'll talk a a little exotic -- very eight.
