What is "share-pushing"?

[averygoodun42]

Or "ramping"? (In stocks, that is.)

I can kind of figure out the basics of what it is (trying to push people to buy shares so as to drive the price up), but I would like something less nebulous in my mind before I write about it.


Also, how would a corporate officer use money loaned from their company to share-push? That's what I really don't get. (I'm looking at section 402 of the Sarbanes-Oxley Act and some interpretations of that section, if you're wondering.)

Comments

[shiv5468.livejournal.com]

S. 402 SA merely prohibits a personal loan. It's not about the loan being used in connection with ramping or any other price manipulation.

http://www.whitecase.com/files/Publication/2c8acfa7-b550-44e9-b47f-bcc6dcb6edb0/Presentation/PublicationAttachment/a4a20bdf-7602-4cb3-85cc-bd0ba17f2089/memo_sarbanes_oxley_act_update_prohibition_personal_loans.pdf

[averygoodun.livejournal.com]

I'm just wondering what these (http://www.goodwinprocter.com/~/media/Files/Publications/Newsletters/Public%20Company%20Advisory/2002/Interpretive_Issues_Under_Section_402_of_the_Sarbanes_Oxley_Act_of_2002.pdf) folks are on about (page 3, paragraph 3.

Granted, upon rereading it, I see they're talking about another statute altogether (Exchange Act 11(d)). Which makes my second question... dumb. Oops. :-/

(And the whole post is moot because I misread the *expletive* assignment and thought I had to report on all the changes SOX imposes on CEOs and CFOs, rather than just their year-end responsibilities. Because, well, that was too easy. *rolls eyes at self*)

I hate lost days due to incompetence.

[shiv5468.livejournal.com]

Nods, two acts, using the same words about extension of credit, and the lawyers are wondering if they should be read the same way.

One act prohibits the extension of credit because it doesn't want people to use them to manipulate share prices.

s. 402 just seems to think that a loan to directors is a misuse of corporate funds.


We do that all the time over here!

[averygoodun.livejournal.com]

It seems as though 402 is more about the way the directors get the loans, as the wording seems rather vague. And exceptional (in the wrong use of that word). Like the Stelmar (http://www.complianceweek.com/s/documents/SEC_Brings_Sarbanes_Oxley_Enforcement_Action_Involving_Loans_to_Officers.pdf) case.

I'm probably misreading it, but it seems as though if the loan process had been more transparent it would have been okay. But, well, it wasn't a bank or other lending institution, so it probably wouldn't have been okay even with the board's approval. Which is kinda stupid, although what with the rampant cronyism of boards and directors, I can see the point.

*hates business*

[averygoodun.livejournal.com]

PS: Thanks!