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Those brilliant Citigroup execs
Remember the big day Citigroup's stock had on Tuesday? It climbed 38%, a whopping 40 cents. Well, that 40 cents helped four Citigroup executives make more than $2 million. How's that? They bought the stock last week.
Bloomberg cites regulatory filings on these trades. The four executives bought the stock March 2nd and made a paper profit of $2.2 million in nine days.
Lucky for them, CEO Vikram Pandit told the world on Tuesday that Citi was having its best quarter since 2007.
Now, this may just be a case of buying when everyone else is selling. In fact, The Street points out a Citi exec who just lost a bunch of money.
One Citi insider who lost money on a recent trade is former chairman Sir Win Bischoff, who reportedly sold 90,423 shares of common stock on March 2 an average price of $1.32 a share to make a paltry $120,000 on the sale.
But it still makes me wonder what was going on behind the scenes. The March 2nd transactions were the first time Citi insiders have purchased stock since January 14.
Yes, I know, there are internal and external rules about bank executives buying their company's shares.
There are rules about a lot of things in the financial system.
Isn't there a rule that stipulates that any person familiar with the internal workings of the company- like... oh, I don't know, let's say executives of that company- can't buy or sell stocks based on proprietary company information regardless of whether they own more or less than 10%?
I'm not being facetious here, I really am curious.
Carter, my understanding is that rule 16(b) of the Securities Exchange Act might apply here. It requires insiders who own MORE THAN 10% of a company's shares to hold the stock for six months. So, if these executives are plus-10% owners, then yes, they do have to hold it for six months. It's not clear from the Bloomberg story whether a. they're plus-10%ers or b. any of the execs have sold their stock. I'm guessing they haven't based on the term "paper profit." But they sure did seem to know where the bottom was, if indeed Citi stock has seen its bottom. It might've just been a common sense purchase, but it's certainly appropriate to ask questions about it.
