orporation while providing services to the corporation. Constructive insiders are also liable for insider trading violations if the corporation expects the information to remain confidential, since they acquire the fiduciary duties of the true insider.

In United States v. Carpenter (1986) the U.S. Supreme Court cited an earlier ruling while unanimously upholding mail and wire fraud convictions for a defendant who received his information from a journalist rather than from the company itself. The journalist R. Foster Winans was also convicted.

“It is well established, as a general proposition that a person who acquires special knowledge or information by virtue of a confidential or fiduciary relationship with another is not free to exploit that knowledge or information for his own personal benefit but must account to his principle for any profits derived there from.” However, in upholding the securities fraud (insider trading) convictions, the justices were evenly split.

In 1997 the U.S. Supreme Court adopted the misappropriation theory of insider trading in United States v. O’Hagan, 521 U.S. 642, 655 (1997),. O’Hagan was a partner in a law firm representing Grand Met, while it was considering a tender offer for Pillsbury Co. O’Hagan used this inside information by buying call options on Pillsbury stock, resulting in profits of over $4 million. O’Hagan claimed that neither he nor his firm owed a fiduciary duty to Pillsbury, so that he did not commit fraud by purchasing Pillsbury options.

The Court rejected O’Hagan’s arguments and upheld his conviction. The “misappropriation theory” holds that a person commits fraud “in connection with” a securities transaction, and thereby violates 10(b) and Rule 10b-5, when he misappropriates confidential information for securities trading purposes, in breach of a duty owed to the source of the information. Under this theory, a fiduciary’s undisclosed, self-serving use of a principal’s information to purchase or sell securities, in breach of a duty of loyalty and confidentiality, defrauds the principal of the exclusive use of the information. In lieu of premising liability on a fiduciary relationship between company insider and purchaser or seller of the company’s stock, the misappropriation theory premises liability on a fiduciary-turned-trader’s deception of those who entrusted him with access to confidential information.

The Court specifically recognized that a corporation’s information is its property: “A company’s confidential information…qualifies as property to which the company has a right of exclusive use. The undisclosed misappropriation of such information in violation of a fiduciary duty…constitutes fraud akin to embezzlement – the fraudulent appropriation to one’s own use of the money or goods entrusted to one’s care by another.”

In 2000, the SEC enacted Rule 10b5-1, which defined trading “on the basis of” inside information as any time a person trades while aware of material nonpublic information — so that it is no defense for one to say that she would have made the trade anyway. This rule also created an affirmative defense for pre-planned trades.

In May of 2007, representatives Brian Baird and Louise Slaughter introduced a bill entitled the “Stop Trading on Congressional Knowledge Act, or STOCK Act.” that would hold congressional and federal employees liable for stock trades they made using information they gained through their jobs. The bill would also seek to regulate so called “Political Intelligence” firms that research government activities and sell the information to financial managers.

Insider trading in India

In India Regulation 3 of the SEBI Regulations seeks to prohibit dealing, communication and counseling on matters relating to, insider trading. Regulation 3 provides that no insider shall either on his own behalf of any other person deal in securities of a company when in possession of any unpublished price sensitive information on communicate, counsel or procure, directly or indirectly any unpublished price sensitive information to any person, who while in possession of such unpublished price sensitive information shall not deal in securities. However, these restrictions are not applicable to any communication required ordinary, course of business or profession or employment or any law.

Further 3 A prohibits any company from dealing in the securities of another company or associate of that other company while in possession of any unpublished price sensitive information.

Insider Trading Regulations have been tightened by SEBI during February 2002. New rules cover ‘temporary insiders’ like lawyers, accountants, investment bankers etc.

Directors and substantial shareholders have to disclose their holding to the company periodically. The New Regulations have added relatives of connected persons, as well as, the companies, firms, trust, etc. in which relatives of connected persons, bankers of the company and of persons deemed to be connected persons hold more than 10% .The definition of relative, under the New regulations is in line with that of the Companies Act, 1956, which ranges from parents and siblings to spouses of siblings and grandchildren. The term “connected person” is defined to mean either i) a director or deemed to be a director, ii) occupies the position as an officer or an employee or having professional or business relationship whether temporary or permanent, with the company. Thus, there are two categories of insiders:

Primary insiders, who are directly connected with the company and secondary insiders who are deemed to be connected with the company since they are expected to have access to unpublished price sensitive information. The jurisprudential basis for the ‘person-connected’ approach seems to be founded in the equitable notions of fiduciary duty.

The secondary insider, who would have traded with an unfair informational advantage, may escape from being caught simply because there can be no trace of how he derived this information in the first place. Insider by reason of his connection with the company. In reality, much of the flow of the price-sensitive information often does not operate by way of such established networks of relational links between individuals. Very often, such price-sensitive information is communicated and spread out through very loosely connected and informal networks of brokers, clients and even between friends and through electronic networks etc. or an elaborate nexus of company official, brokers, traders. These individuals are very often privy to strategic policy decisions or developments that may influence the valuation of a company’s scrip on the bourses

Duties/ Obligations Of the listed company under the SEBI (Prohibition of Insider Trading) Regulations, 1992



To appoint a senior level employee generally the Company Secretary , as the Compliance Officers;

To set up an appropriate mechanism and to frame and enforce a code of conduct for internal procedures,

To abide by the Code of Corporate Disclosure practices as specified in Schedule ii to the SEBI (Prohibition of Insider Trading)Regulations , 1992

To initiate the information received under the initial and continual disclosures to the Stock Exchange within 5 days of their receipts;

To specify the close period;

To identify the Price Sensitive Information

To ensure adequate data security of confidential information stored on the computer;



To prescribe the procedure for the pre- clearance of trade and entrusted the Compliance Officers with the responsibility of strict adherence of the same

The penalties /punishments can be imposed in case of violation of SEBI (Prohibition of Insider Trading) Regulations, 1992

1. SEBI may impose a penalty of not more than Rs 25 Crores or three times the

amount of profit made out of insider trading; whichever is higher; or

2. SEBI may initiate criminal prosecution; or

3. SEBI may issue orders declaring transactions in securities based on unpublished price sensitive information; or

4. SEBI may issue orders prohibiting an insider or refraining an insider from dealing in the securities of the company

Conclusion -The new 2002 regulations in India have further fortified the 1992 regulations and have increased the list of persons that are deemed to be connected to Insiders. Listed companies and other entities are now required to frame internal policies and guidelines to preclude insider trading by directors, employees, partners, etc. In the past, it has been observed that insider trading legislation is ineffective and difficult to enforce and has little impact on securities markets. Low enforcement rates and few convictions against insiders have been cited as evidence of this ineffectiveness. Irrespective of whether or not the SEBI was bestowed with wide ranging powers, it has been a clear failure when it came to the task of administering the law.

The importance of policing insider trading has also assumed international significance as overseas regulators attempt to boost the confidence of domestic investors and attract the international investment community. So, SEBI now should take the role of a regulator only. Special Courts could be set up for faster and efficacious disposal of cases.

 

]]> http://www.dakar-delices.com/insider-trading.html/feed 0 http://www.dakar-delices.com/think-and-grow-rich-understanding-the-role-of-specialized-knowledge.html http://www.dakar-delices.com/think-and-grow-rich-understanding-the-role-of-specialized-knowledge.html#comments Sat, 17 Jul 2010 12:27:46 +0000 admin http://www.crawbot.co.cc/?p=4959

“There are two kinds of knowledge”, states Napoleon Hill, author of “Think and Grow Rich; “one is general and the other specialized”. Contrary to most educational systems Mr. Hill believed that general knowledge in and of itself was worth little, regardless of “quantity or variety”.

 

He further believed that knowledge is not power, as many to this day believe and state, but rather the potential for power. Knowledge, according to him, has a conditional requirement for power. It must be organized into a definite plan of action with a definite direction.

 

Mr. Hill says, “An educated man is not, necessarily, one who has an abundance of general or specialized knowledge”. Furthermore he states, “An educated man is one who has so developed the faculties of his mind that he may acquire anything he wants, or its equivalent, without violating the rights of others”.

 

He cites Henry Ford as an example. Mr. Ford was not concerned with having great general knowledge. If he needed the answer to a question that he didn’t know, he simply asked one of his employees that were experts in their field. Today we would call that a master mind group.

 

So was Napoleon Hill anti-knowledge?  Certainly not! He realized that only applied and directed knowledge had value, and that no one person had to posses it all personally.

 

So what does specialized knowledge have to do with thinking and growing rich?

 

“Think and Grow Rich”, does not state that riches will just appear. But rather to the willing mind, a way will open to acquire them through some sort of action. In Mr. Hill’s personal experience, this action most often required a special type of knowledge.

 

 Specialized knowledge as he defined it is, “knowledge of the service, merchandise or profession which you intend to offer in return for fortune”. Many examples are given in his text of this process, but the cases are all similar. There is a call for action, a demand for special knowledge and then an action to be taken.

 

A simple illustration may explain it best. Often times we need to get from point A to point B in life. This process will require us to take action. In order to accomplished this we need to have or gain specific information, a specific skill, provide a service, etc. As we acquire and utilize these things we can begin to make the transition toward our goal.

 

A secondary result, he noted, will often occur at this point. An idea will be born with the addition of imagination to our specialized knowledge. It’s sort of like being in the right place at the right time and all the right things are in place.

 

The birth of this idea is our moment of opportunity. It’s the seizing, or rather our seizing of the moment, that can lead to our fortune.

 

“Think and Grow Rich” introduces us, the readers, to the need and the possibility of making dramatic changes in our lives and reaping the benefits. The choice is always ours. The alternative though, is to remain the same, doing the same things and seeing the same results.

]]> http://www.dakar-delices.com/think-and-grow-rich-understanding-the-role-of-specialized-knowledge.html/feed 0 http://www.dakar-delices.com/starting-a-marine-aquarium-the-very-first-considerations.html http://www.dakar-delices.com/starting-a-marine-aquarium-the-very-first-considerations.html#comments Sun, 11 Jul 2010 13:16:30 +0000 admin http://www.alipah.co.cc/starting-a-marine-aquarium-the-very-first-considerations.html

Seeing pictures of a healthy marine fish only or reef aquarium in books or on the internet, or even better, in reality at a public aquarium will cause just about anyone to appreciate the beauty and general fascination of them. Some people will wonder if they could have one, and the thought will shortly disappear. Others, however, will not forget so easily and will want to delve further into the possibility of having their own home aquarium.

If the potential aquarist knows a friend who already has a healthy marine aquarium, then there is a source of advice available already. The friend will already have been through all the research and considerations. Often, however, the potential aquarist will want to find out for him/herself. That is very good, as the aquarium system will be understood thoroughly. Then there may not be a known marine aquarist available, so what is the first move? Dashing to the local shop and buying an aquarium and a few bits of equipment that the shop says is needed is totally incorrect.

The first move is to follow a planning scaffold. This scaffold will be the foundation for all the decisions that need to be made in building the system. There are quite a few decisions along the way and things can get a little confusing, even to someone who is experienced in the freshwater aquarium field. The scaffold will help.

The scaffold has to prepare the budding marine aquarist so that indicative costing on basic equipment provision can be made. Often marine aquarists have equipment laying about. This could have been caused by upgrading because the original equipment was not adequate and needed to be replaced. Money expended that perhaps need not have been.

So, the scaffold then. The following is a list of headings and basic notes. It does not attempt and is not intended to open a comprehensive path from zero to a fantastic fish only or reef tank. What it does do is give a lead to follow on the way towards a successful aquarium. No doubt extra considerations will arise on the way, and that’s as it should be, it means the planning is working. Each stage of planning needs individual consideration, and there will often be more than one decision to make. On the way, research using books and/or the internet is useful or necessary.

Where is it practical to site the aquarium?

Try to choose a location away from direct sunlight, to assist with proper lighting control. There should not be heavy and/or noisy household traffic passing (reasonable traffic is acceptable). There needs to be a reliable power supply available, ie. power outlets. Generally easy access to the aquarium is required. If floors are suspended, consider floor strength – aquariums full of seawater are heavy!

What size aquarium?

The aquarium should not stand on ordinary furniture, but on a properly designed stand. The aquarium may need a hood. These need to be taken into account. Then the available space for the aquarium can be considered.

What type of system?

The system can be fish only or reef. This decision affects other later decisions. Most will opt for a reef.

Sump or no sump?

A sump is a small aquarium that is attached to the main one. It supplies extra water capacity to the system, and allows heaters, sand beds and protein skimmers to be kept away from the display aquarium. The sump can be beside or underneath the display aquarium. A sump on any type system is highly recommended. (If a sump is to be used, the main aquarium will need to be drilled to allow plumbing to take water from the aquarium to the sump. It is then pumped back again.) Note: if a DSB (deep sand bed) or plenum (a raised DSB) is to be employed, the sand bed area should be at least 2/3rds of the base area of the main aquarium. The sand bed should be at least 4? deep. Consider the cost for the fine sand for the DSB. A DSB in the sump is highly recommended. Leave enough room for a partitioned area for the seawater return pump.

Lighting?

Is the system to be fish only or a reef? If fish only, then two marine fluorescents are sufficient. If reef then:

Hard corals.

Best lighting is halide, supplemented by actinic fluorescent tubes. T5 fluorescent tubes can be used (marine white and actinic equally mixed) but they do not penetrate the seawater as deeply.

Soft corals.

It is sufficient to use T5 fluorescent lighting (actinic and white mixed). Halide lighting can be used, however, and will not be detrimental (ensure corals exposed are light demanding varieties).

Net seawater capacity of aquarium and sump (if used)? This is easily calculated once the aquarium size and sump have been decided. This gallonage will be excessive as, when rocks and sand are added, it will decrease. Therefore, reduce the amount by 10%. This will still not be correct, but does give a reasonable allowance for displacement.

Seawater circulation?

The seawater in the display aquarium will need to be circulated for the health of the inhabitants whatever they are, but particularly in a reef system. It is recommended that a minimum of two powerheads are used to achieve this. The turnover of seawater in a reef needs to be around ten to twenty times the net capacity of the display aquarium (exclude the sump) per hour, depending on coral occupants.. In fish only systems, it can be less.

Protein skimmer?

A protein skimmer is essential for most systems(*), in particular where there is inexperience. The device is very useful as it helps significantly towards high water quality. The protein skimmer should be sized for around twice the net seawater capacity of the aquarium plus sump (if used). Now that the use of a sump (or not) has been decided, consider whether to use a hang-on or stand alone skimmer.

(* some mud based system designs do not require a skimmer.)

Heating?

The net gallonage of the system is known, so the heating need can be considered. (Note: it is best to purchase two heaters as this is a good safety feature for the aquarium inhabitants. Each heater should be one half of the total heating requirement.) In warm areas where temperatures are always above 80 deg F, the use of a seawater cooler (chiller) will replace heaters.

Return pump?

This only applies if using a sump. Seawater, once it has flowed to the sump, needs to be returned to the main aquarium. A pump is required for this. As a guide, the flow through the sump should be two or three times the net capacity of the system per hour. When considering the pump, remember to factor in the lift, that is the height from the pump level to the highest point that the returning seawater reaches before it enters the main aquarium.

‘Live’ rock.

This is used for filtration purposes (it is excellent for this) and for the construction of the reef. It can also be used in a fish only system. Allow 1½ lbs for each gallon that is in the entire system. There are other filtration methods, but ‘live’ rock coupled with a DSB in a sump is highly recommended.

Reverse osmosis (R/O) unit?

The R/O unit is a tap water filtration device that removes nearly all (around 95 to 98%) unwanted contaminants. Therefore the seawater mix is at its best from the start. It is highly recommended that R/O water is always used, including the first fill of the aquarium. R/O units come in different gallons per day outputs. Remember that usually the aquarium is filled completely only once. The normal routine water change amount is 10% of the net system gallonage weekly.

Dry salt mix?

There are several makes on the market. If keeping a reef system, obtain one that is ‘designed’ for reefs, as additional attention has been given to calcium content etc. Fish only systems can use ‘standard’ mixes or as described above.

Make a list.

As each item is gone through, find out and write down the likely cost. If it is electrical, also write down the wattage (W

).

The evidence. When all items are priced, add them up. This represents a general guideline to the cost of setting up. If electrical, add up the wattage. Divide the total wattage by 1000, this will give kilowatts. The cost of electricity per kilowatt will be known. Multiply the number of kilowatts, including any fraction, by the cost per kilowatt, this is the approximate electrical running cost of the system per day. To get weekly, multiply by seven. Monthly, multiply by four. Etc. (Note: lights can be considered as being on 50% of the day. Heaters/coolers will not be on all the time, but it is difficult to determine a guideline percentage.)

OK. The list is there and it indicates the guideline aquarium equipment cost and electrical running cost of the system. These will not be completely accurate but near enough to either dissuade the desire to have an aquarium or to go ahead. There are other costs, of course. For example, no account has been taken of the fish and/or corals that are to inhabit the aquarium. Then additional equipment, often considered later, might be obtained, such as a calcium reactor, a de-nitrator, or a canister filter etc. Maybe coarse coral sand, ½ to 1? deep, will be used as a decoration in the display aquarium.

Nevertheless, the scaffold will have achieved its purpose, which is to generally guide the new aquarist down a path that cuts its way through what can be a confusing beginning.

After the scaffold, there is still plenty to be done. Many answers can be found in the listed articles on this site (http://www.aquaristsonline.com).

Appropriate articles can be worked through one by one. Any remaining questions can go on the forum. The internet is an excellent resource for knowledge. Typing in a name, eg, marine aquarium lighting etc, into a search engine should produce a good response. Then, of course, there are books. Nothing like an hour of bedtime reading!

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