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.
4. Sony's Memory Lapse
Sony's(SNE) massive earnings revision this week had us reminiscing about the days when the Walkman maker ruled the earth. Sadly, it also reminded us how far the Japanese giant has subsequently stumbled.
So as a tribute to the once-proud PlayStation maker, let's play a little 5 Dumbest memory game, shall we?