The 5 Dumbest Things on Wall Street This Week: April 13
5. Zhongpin's Little Piggies
Here's a twist on an old Wall Street aphorism: Bulls make money, bears make money and really dumb pigs illegally trading pork stocks get their accounts frozen.
A half a dozen Chinese citizens purported to have unlawfully purchased shares of Chinese pork processor Zhongpin (HOGS) had their accounts restricted last Friday by an emergency court order. The move arrives only two days after the Securities & Exchange Commission alleged that these individuals illicitly pocketed $9 million as a result of buying Zhongpin stock prior to the company announcing a bid to take it private.On March 27, Zhongpin Chairman and CEO Xianfu Zhu personally offered $13.50 per share for the enterprise, causing shares in Zhongpin to soar 22%. The SEC claims the six less-than-slick characters spent the two weeks before the announcement swine-ishly snapping up stock and call options on the company, even though most of the crew had never traded the stock before. How hilarious is that? The first time these little piggies go to market they get busted for insider trading! "The defendants in this action -- all with seemingly limited resources -- suddenly and inexplicably purchased more than $20 million in Zhongpin securities just before an important public announcement," said Merri Jo Gillette, director of the SEC's Chicago regional office, in a statement. And to paraphrase our good friend Porky Pig, "That's not all folks!" In addition to freezing the accounts, the SEC said plans to seek permanent injunctions and financial penalties if the gang is found guilty of insider trading. What a sad situation. But still, let it be a lesson to all you potential piggies out there. If you find yourself with non-public information, just stay home and eat roast beef, or the SEC will go "Wee Wee Wee" all the way home.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV