Timothy's Game Read Online Free PDF

even by the Supreme Court. Let me give you a for-instance. Suppose one of your guys is working every night on a megabuck deal. His wife is furious because he’s continually late for dinner. So, to explain his long hours, he tells her he’s slaving on this big buyout of the ABC Corporation by the XYZ Corporation. His wife mentions it to her hairdresser. He mentions it to another customer. She tells her husband. The husband mentions it to his car dealer, and the dealer runs out and buys ABC Corporation stock and winds up making a bundle. Now who’s guilty there? The original investment banker didn’t profit from his inside knowledge; he just had a big mouth. And the guy who did profit, the car dealer, was just betting on a stock tip. He didn’t have any inside knowledge. How do you stop that kind of thing?”
    “Yes,” Twiggs says slowly, “I see what you mean.”
    “Also,” Cone goes on, “the leak on the Wee Tot Fashions deal may not have been in your house at all. The arbitrageurs have a zillion ways of sniffing out a deal in the making while it’s still in the talking stage. They pick up one little hint, hear one little rumor, that XYZ is going to make an offer for ABC, and they go to work. They try to track the whereabouts of the chairman, president, and CEO of both corporations. They’ll even check the takeoffs, flight plans, and landings of corporate jets. They’ll bribe secretaries, porters, pilots, chauffeurs, office cleaning ladies, security guards—anyone who can possibly add to their poop on who is meeting whom and what’s going on. There’s a lot of money to be made on advance knowledge of deals in the works, and the arbs want some of it. But I wouldn’t call that insider trading—would you? It’s just shrewd investigative work by guys who want a piece of the action.”
    “I suppose you’re right,” the little man says, rubbing his forehead wearily. “Very depressing. That men would go to such lengths to make a profit. It wasn’t like that in the old days.”
    “Maybe, maybe not,” Cone says. “In the old days there was only a handful of people who knew about a deal in the making—just the principals and a few lawyers—so it was relatively easy to spot the gonnif if someone leaked or made an illegal profit on his own. But now, in any big-money deal, there are hundreds of people with inside knowledge: corporate officers and their staffs, the investment bankers and their staffs, attorneys and their staffs, accountants and their staffs. Then you’ve got secretaries, telephone operators, and messengers. Any one of them could spill or make a dirty buck.”
    “Ah, me,” Twiggs says, sighing. “So you believe it’s impossible to stop insider trading?”
    “Sure it is,” Cone says cheerily. “As long as people’s itch for a dollar overrides their ethics or morals or whatever the hell you want to call them.”
    “I should think that heavier penalties might be effective.”
    “Yeah?” Cone says. “Ever hear of the ‘hangup gimmick’?”
    “The hangup gimmick? What on earth is that?”
    “An arbitrageur hears a rumor that ABC Corporation may be bought out by the XYZ Corporation. The arb has a drinking buddy with the legal firm that handles ABC. He calls his lawyer buddy and says, ‘I hear XYZ has made an offer for ABC. If the rumor is true, don’t say a word. I’ll stay on the phone. But if you’re silent and then hang up after ten seconds, I’ll know which way to jump, and you’ll get your share.’ So the ten seconds pass in silence, the lawyer hangs up, and the arb rushes to buy ABC stock. Who do you prosecute? The attorney, the insider, hasn’t leaked a word, and can swear to it in a court of law. How do you prosecute him? There are a hundred scams like that. So when you talk about heavier punishment for insider trading, you’ve got to realize how tough it is to get a conviction.”
    G. Fergus Twiggs gives him a quirky smile. “Are you trying to talk yourself out of a