Insider trading: if it looks like a duck and quacks like a duck... Maverick hedge fund manager Bill Ackman, prone to creating controversy, has whipped up a new Wall Street storm over the US's murky insider trading laws. He quietly bought a 9.7 per cent stake in drug company Allergan in the past two months. He bought the Allergan share options after Valeant Pharmaceuticals confidentially told him it intended to launch a takeover for its competitor, presumably at a premium to the market price. Valeant sought to team up with Ackman, a high-profile activist investor, to make its hostile acquisition easier after previous overtures were rejected by Allergan. When plans were announced last week, Allergan's share price popped, netting Ackman's Pershing Square Capital Management a paper profit of almost $US1 billion ($1.07 billion) on its $US4 billion outlay. No one, including those who sold their securities to Ackman at a significant discount to the subsequent trading price, knew of the takeover offer. To some it may be classic insider trading. Some unhappy investors want it examined by the Securities and Exchange Commission. Yet under the US's obscure insider trading laws, Ackman has acted legally. His lawyer is Robert Khuzami, the former head of enforcement at the SEC. "The way the rules work is, you're actually permitted to trade on inside information as long as you didn't receive the information from someone who breached a fiduciary duty or a duty of confidentiality," Ackman confidently said last week. http://www.smh.com.au/business/mark...iners-surge-20140428-37cro.html#ixzz309a50dgD Or if you have AFR subscription full story here: www.afr.com/p/opinion/ackman_opens_up_insider_trading_RRofAgdug7TKo8MqZQiAhM
