Was Washington's GM Stock Sale a Case of Insider Trading?
Published on May 24th, 2014 |
by Jo Borrás
Was Washington’s GM Stock Sale a Case of Insider Trading?
You can forget about Benghazi. Benghazi was never a “real” scandal, anyway, but that’s not why I’m saying that. I’m saying it, because if the Obama administration’s recent divestment of GM stock just before the company’s current recall woes began to drive its stock prices into the gutter turns out to be something more than a simple coincidence, it will be an insider trading scandal of massive proportions.
Many industry observers criticized the Government’s decision to sell off its GM stock for an $11.2 billion loss last December, calling the move irresponsible and prompting Treasury spokesman, Adam Hodge, to defend the move. “The goal of Treasury’s investment in GM was never to make a profit,” he wrote to Bloomberg in an email, “but to help save the American auto industry, and by any measure that effort was successful.” Even President Obama came out in defense of the Treasury’s move, saying that, “When things looked darkest for our most iconic industry, we bet on what was true: the ingenuity and resilience of the proud, hardworking men and women who make this country strong.”
Uh-huh.
That much-criticized December sale of GM stock looks like a shrewd and inspired business maneuver, today. In fact, it looks a little too shrewd and inspired. That’s because, in February of this year (just 60-ish days after the sale), GM announced the recall of nearly 800,000 cars for faulty, death-dealing ignition switches. In the months since, even more GM vehicles have been recalled for other problems with severities ranging from “that seems serious” to “Sweet, tap-dancing Christ!”
It’s certain, now, that GM insiders knew of the company’s impending problems well before the Government’s divestment of GM stock. As such, it’s safe to assume that the Government-appointed GM board members and staff knew of the problems, as well. They, and people at the NHTSA, could have tipped off people within the Treasury Department to GM’s now certain doom impending crisis.
Click through the articles we’ve linked to, above, and see if they “connect the dots”. Or, just skip ahead and tell us what you think about all this insider trading business in the comments section at the bottom of the page. Be sure to wear your flame suit, if you do!
Sources: Bloomberg, CNN, NYTimes, Reuters, and the Truth About Cars.
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About the Author
Jo Borrás I’ve been involved in motorsports and tuning since 1997, and write for a number of blogs in the Important Media network. You can find me on Twitter, Skype (jo.borras) or Google+.
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Was Washington's GM Stock Sale a Case of Insider Trading?
