http://www.n4g.com/industrynews/News-51255.aspx

 Is someone pulling a Martha.

That sounds very shady.

Corporate corruption as always.

The share holders will not be too pleased with this. They were already very pissed off with the whole Xbox 1 debacle.

I hope this guy and MS get what they deserve if this is in fact true.

Grand Theft Stock Market: Redmond, WA

Microsoft needs to get rid of a few people in it's Entertainment and Devices Division... Zune was marketed badly and should never have been made in the first place, Xbox 360 hardware problems should have been dealt with within the first 6 months of production, and their planned casual games are laughable compared to what Nintendo has for casual. The only thing they're doing right is their hardcore games.

He didn't sell on schedule. In other words, he had a bunch of shares that he wanted to drop quickly for some reason, instead of selling mabey 20% of what he wanted to sell for a "scheduled" release, or in other words something that might take a year to fully get done.

This doesn't mean that he should even go to court for insider trading, just that it was an unusual event.

Secondly, the matter of the failures of the XBOX failures seems like some thin gruel to me. Granted, the failures have had a big impact on the sales of the 360 as it has just taken a lot of money away from it that has been budgeted. I really think that the 360's failures is a big reason why its sales (thankfully) haven't came up to 60K a week, and also why SONY of all companies is beating MS when it comes to nabbing sweet exclusives. MS has seen that its 360 is performing poorly right now, and is keeping them on a tight leash.

But, to be considered insider trading and illegal, the trading must be trading on information that is:

1. Material- Meaning that whatever secret knowledge is being traded because of, will have a big impact on financial performance. I would say that this trading is material.

2. Non-public information - If the stock's owner trades on information that is non public, meaning that the public would have no idea about it..... it would be considered non-public information. I honestly can't buy this one. I think that the public has been informed to at least some degree about the horrible failure rates of the 360, even given microsoft's refusal to discuss the matter.

Because this trading doesn't appear to violate the second reeequirement for bad trading I would say, and i'm not a lawyer just a business student, that this doesn't look THAT bad.

I told all you guys about MS, shady mo-fos... They have all the business ethics of an Enron executive, heh.

http://en.wikipedia.org/wiki/Insider_trading

I found this interesting:


Arguments for legalizing insider trading

Some economists and legal scholars (e.g. Henry Manne, Milton Friedman, Thomas Sowell, Daniel Fischel, Frank H. Easterbrook) argue that laws making insider trading illegal should be revoked. They claim that insider trading based on material nonpublic information benefits investors, in general, by more quickly introducing new information into the market.

Milton Friedman, laureate of the Nobel Memorial Prize in Economics, said: "You want more insider trading, not less. You want to give the people most likely to have knowledge about deficiencies of the company an incentive to make the public aware of that." Friedman did not believe that the trader should be required to make his trade known to the public, because the buying or selling pressure itself is information for the market.

Other critics argue that insider trading is a victimless act: A willing buyer and a willing seller agree to trade property which the seller rightfully owns, with no prior contract (according to this view) having been made between the parties to refrain from trading if there is asymmetric information.

Legalization advocates also question why activity that is similar to insider trading is legal in other markets, such as real estate, but not in the stock market. For example, if a geologist knows there is a high likelihood of the discovery of petroleum under Farmer Smith's land, he may be entitled to make Smith an offer for the land, and buy it, without first telling Farmer Smith of the geological data. Of course there are also circumstances when the geologist could not legally buy the land without disclosing the information, e.g. when he had been hired by Farmer Smith to assess the geology of the farm.

Advocates of legalization make free speech arguments. Punishment for communicating about a development pertinent to the next day's stock price might seem to be an act of censorship.

@dallas
I think I would prefer letting the courts decide if they have competency in this matter. I'm not a lawyer and I only know what that story says so I wouldn't hazard a guess on whether this should become a legal issue. All I will say is it sounds very shady.  Though as a business student I can see why you would prefer the courts not getting involved in situations like this .