Time to Go Back to CEO School

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The new C-Suite

After Martha Stewart of all people was convicted of securities fraud for insider trading, you’d think highly-paid CEOs and Board of Directors members today would tread lightly around any activity that might attract unwanted attention from the Securities and Exchange Commission. Martha was worth about a quarter of a billion dollars at the time she acted on inside information about drug-maker Imclone so as to avoid a few thousands in losses – a figure that probably equates to less than a week’s worth of feed for the heirloom chickens cavorting on her tony Connecticut compound. So stupid.

Yet in the past couple of days we’ve seen similarly blatant idiocy coming from titans of industry and government. Will they never learn?

Billionaire entrepreneur and futurist Elon Musk kinda stepped on his own dick the other day by using Twitter to communicate significant financial information that would normally be contained in a formal SEC-approved document and vetted by the board of directors prior to publication. Musk, who is the head of SpaceX, the Boring Company and most famously, Tesla, the darling manufacturer of electric cars, solar panels and clean energy storage, is tired of having to deal with pesky investors and government oversight of their operations. He wants to take Tesla private by acquiring all the outstanding shares of the company. With Tesla no longer a publicly traded company, Musk figures he’ll be able to operate the company with fewer morons looking over his shoulder.
In a tweet last week, Musk said this:

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Now, making a statement that he’s thinking about taking Tesla private is one thing. Claiming the price he’s willing to offer ($420) is solid because “funding secured” is quite another. Naturally, Tesla stock spiked up immediately before trading was halted due to the furious nature of the activity spurred by the ill-conceived tweet.

Was funding really secured? If so, who is the source? Was $420 a bona-fide offer or just a number Musk pulled out of his ass with help from equipment provided by his Boring Company? The SEC wants to know.

Meanwhile, a slew of investors with short positions shit their pants while watching Tesla stock fly to the moon on Musk’s cryptic tweet. Some suspect that Musk put out the tweet precisely to fuck with the shorts – something every CEO would like to do in his or her dreams but knows better not to.

Last Friday, a trader named Kalman Isaacs filed a class-action lawsuit on the basis that Musk’s tweet amounted to securities fraud. Now the fun can begin. If Musk can’t validate what he pooped out on Twitter, you can expect more lawsuits and deeper SEC intrusion – not the kind of self-inflicted wound the struggling company needs at the moment. The stock price is back to where it was pre-tweet suggesting investors think Elon was just goofing. I wonder what the investigators will think?

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Representative Chris Collins of New York’s 27th district really screwed the pooch when he pulled a Martha and spread insider information to his son and others after finding out the bad news that a phama company he had invested heavily in would soon be worthless. The company, Innate Immunotherapeutics had been working on a drug for multiple sclerosis, but after final trials, it was proven to be ineffective. As the MS drug was the only asset Innate had, its failure meant the company would go casters up once the news was released.

Business genius Collins who had convinced his entire extended family and at least five congressional colleagues to invest suddenly faced a situation eerily similar to that of Martha Stewart and Imclone. And like Martha, Collins – who should have known better – passed on the insider poop. Of course, treated to the info, the investors dumped the rancid stock on unsuspecting buyers who took a bath when the stock lost 90 percent of its value after the news went public. Funny how that works.

Collins and his son were arrested for insider trading and posted bail. Collins Sr., who did not actually sell his shares on the bad news, initially stood fast on his plans to run for re-election in November, but in the face of a virulent shitstorm from partisans – and no love from his fellow Republicans – he announced he’s dropping out. But not before taking a page from the standard play-book and denouncing the charges as “meritless.” Dude – the SEC has your phone records from the moment the Innate CEO texted you the rude news. If by “meritless” you mean “ironclad guilty.” then I’ll forgive you.

Collins held a position of four million shares in Innate making him the largest shareholder. He was also a member of the board. In addition to being heavily invested in Innate, Collins also holds large positions in Mead Supply, Oxygen Generating Systems Intl., Audubon Machinery Corp, Schlyer Machine, Volland Electric and ZeptoMetrix Corporation.

You would think that such experience would cultivate a sense of business acumen. Getting away with insider trading as blatantly obvious as that committed by Collins is about as likely as hiding a Ponzi scheme for 100 years. Collins had to know that – yet he fucked himself up anyway.

Time to go back to CEO school for a refresher – after spending a little time at the grey-bar hotel.

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Satan’s Angel

Intrigued by a head-shaking article about a cabal of three Mar-a-Lago members and Trump buds who actually run the Veteran’s Administration, I couldn’t help but be drawn to an accompanying photo of the swearing-in ceremony of latest VA head Robert Wilkie. In the photo applauding the festivities stands VP Mike Pence with his benign doll’s eyes stare, watching over Trump like some creepy guardian angel.

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And now that I’ve thought about it, I’ve concluded that white-haired Pence really is an apparition sent by Satan to protect Orange Man from applying too much hairspray or signing executive orders with his toothbrush or devouring a scrap of paper or appointing Pat Sajak ambassador to a country with no vowels in its name.

It’s there plain as the collusion on Don, Jr’s greasy mop: Just over Trump’s shoulder the angelic Pence watches, his face never betraying fear or astonishment, his vacant eyes affixed to Trump’s cantilevered hairdo, wondering what foibles he’ll have to manage next.

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