My friend Thomas Lifson (blogger and winemaker) note s some curious trading by Sumner Redstone, Viacom's CEO (and major contributor to the Dems), during the Rathergate episode:
A copy of the SEC?s Form 4 ?Statement of Changes in Beneficial Ownership? posted on [Voacom's] website indicates that the billionaire exercised 341,500 options, and sold the stock on the same day, September 14, 2004. ... It is frankly mind-boggling to contemplate that Redstone would take such a step. There must be some compelling reason for him to have exercised the options and sold the shares, a reason which would immediately cause the SEC to accept it as valid. But we don?t know what it is. ... At the end of trading Friday, Viacom stock closed at $34.73. By selling at $35, Redstone made an extra $92,205 on his shares, compared to what they were worth at the end of the week. His profit on the deal totaled $6,744,625 before brokerage fees.
I agree with Thomas that the timing of the sale is a bit curious, but I suspect there is an innocent explanation. One possibility, for example, is that Redstone has a Rule 10b5-1 plan pursuant to which he routinely liquidates the shares covered by such options. If so, he would have had to effect the transaction so as to maintain the plan's viability, the whole point of such plans being that you always trade according to a pre-set pattern regardless of what's going on at your firm. For an overview of the insider trading rules, including 10b5-1, relevant to the recent trading by Viacom insiders, see this post.
Update: I stand corrected. Dinocrat has persuasive evidence that Redstone's sales were not effected within a 10b5-1 plan. Hence, my speculation was erroneous. Having said that, however, I still doubt whether his conduct would qualify as insider trading. There's still going to be problems of materiality and causation that will be difficulty to overcome.
