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(visit the link for the full news article)
Here's how it works:
1. An insider client transfers all or a portion of their company stock into a JP Morgan Securities Inc. brokerage account.
2. The insider then develops, in conjunction with the 10b5-1 team, a 'phased, pre-planned sales program to be executed at either market or
3. Depending on the information available to the insider (but not the public), the insider can decide whether to execute the sale or not.
By gaming the system this way, JP Morgan teaches insiders how to use their knowledge to create a rigged market, one in which it is the "house" that always wins, and the small investor that always loses.
According to a statistical research paper published by Stanford's Graduate School of Business in September last year, executive 10b5-1 trades beat gains relative to non 10b5-1 executive trades by more than 500%.
One can only guess at how many insiders profited under JP Morgan's "insider trading program," leaving small investors holding the bag.
Originally posted by Beefcake
Its feels like there is just too much corruption. Society is literally being tricked over and over.
while this does, yet again, show the unfair advantage execs have over the general public, JP Morgan is not doing anything wrong. They've found a loop hole and they're exploiting it for the benefit of their clients. It's why they get paid. No different than a client paying me to find the best possible tax strategy based on the tax laws. If there's a way to beat the system without breaking the law, you beat it.
Originally posted by Shakesbeer
Yeah but the problem is all of it equals exploitation, bridling the majority while the wealthy minority continue their reign of the financial institution and buy influence over the ruling parties of the world. Slightly different from Joe-average wanting a couple of extra hundred bucks on his tax return I would say.