New Jersey Man Will Totally Be First To Beat Insider-Trading Rap

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Titan Capital Management co-founder Steven Slawson has had his troubles in the past, but now he’s really in the soup, what with the criminal insider-trading charges in a case that has already won three guilty pleas. Oh, yeah, and with his alleged source ready to hop up onto the witness stand to tell a jury about all of the money Slawson paid him for inside dirt on a child’s clothing company.

No matter: Slawson is positively eager for the chance to prove that professedly innocent people can stay out of jail under such circumstances.

A New Jersey hedge fund manager pleaded not guilty on Thursday to charges he traded on inside information about the children's clothing company Carter’s Inc, according to court papers….

Prosecutors accused Slawson of obtaining advance information about Atlanta-based Carter’s quarterly results from 2005 to 2010 from a paid consultant who, prosecutors said, had learned the details in turn from former Carter’s executives Eric Martin and Richard Posey.

The consultant is cooperating with authorities and was not named in the indictment….

“He’s innocent, and we look forward to proving that at trial,” said Slawson’s lawyer, Todd Harrison, in a phone interview on Thursday.

Hedge fund manager charged in Carter’s insider trading probe [Reuters]

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After The STOCK Act It Will Still Be Legal To Trade On Congressional Inside Information*

Here's a sort of touching monologue from David Einhorn's call with Punch: If you’ve done the analysis, and come to the conclusion that on it’s own, the company is not going to make it, it makes all of the sense in the world to raise equity at whatever the price is, so that you can know that the company, you know, is – is going to make it. Now, what that brings to my mind though is, you know, obviously we haven’t done your analysis, we haven’t done -- signed an NDA; I don’t know that we’re going to sign an NDA, because we prefer to just remain investors, but from my perspective, and I’ll be just straight up with you, is that gives a lot of signalling value. And the signalling value that comes from figuring out the company has figured out that it’s not going to make it on it’s own is that we’ve just grossly misassessed the -- you know what’s going on here. And -- and that, that will cause us to have to just reconsider what we’re doing, which is not the end of the world to you. You will continue on even if we don’t continue on with you. You could sort of see why the FSA read that to mean that he was insider trading. Like ... (1) You have told me something with signalling value. Sorry - "a lot of signalling value." (2) I will now act on that signal. (3) Don't be mad. "Signalling value" sure sounds like it means "material nonpublic information," doesn't it? Now as we've discussed before, trading on that information would not be enough to make Einhorn guilty of insider trading in the US, though maybe it wouldn't be exactly a great idea here either. Why? Because in our weird but sort of sensible insider trading laws, it's just not illegal to trade on material nonpublic information. It's only illegal to trade based on material nonpublic information that was obtained in violation of some sort of duty of confidence. Since Einhorn didn't sign an NDA, he had no duty of confidence. And since the Punch CEO and bankers weren't tipping him for nefarious purposes, but were instead sounding him out on the company's behalf as a shareholder and potential investor in a new capital raise, they weren't breaching their duty of confidence. You could quibble with the details of that but it's basically the law here. In England not so much. That also seems to be the law for our friends in Congress, who recently passed a law making it illegal for them to insider trade, which is worrying some people who make their living from trading on Congressional inside information: