Can the U.S. SEC prosecute Doug Kass over Apple stock split rumor?

“Apple’s (AAPL) shares moved sharply from the red to the green Tuesday afternoon. There are a couple theories why, but the leading contender is the rumor on Twitter posted just before the stock popped by Douglas Kass, president of the Seabreeze Partners hedge fund, frequent contributor to The Street and regular guest on CNBC,” Philip Elmer-DeWitt reports for Fortune.

“We’ve been hearing quite a lot from Kass since The Street published his The Bear Case for Apple on Sept. 24, 2012, the first trading day after Apple hit its all-time high of $705.06. It would be a mistake to credit him with the subsequent five-month, 38% drop in Apple’s share price that lopped $250 billion off the company’s market value,” P.E.D. reports. “But it’s hard not to pin Tuesday’s action on Kass’ Twitter posts or to see how he profited from them. The stock was down. He tweeted the split rumor. The stock went up. He sold shares while tweeting that his rumor was baseless.”

P.E.D. reports, “For the record, the purposeful spreading of false information in connection with the purchase or sale of securities violates several sections of the Securities and Exchange Act. That ‘purposeful’ bit is the loophole. The trick, should the SEC choose to look into the incident, would be to prove that Kass knew the rumor was false when he posted it.”

Read more in the full article here.

MacDailyNews Take: Regardless of whether the SEC wakes up from this latest poke in the eye and decides to at least make Kass’ life as miserable as it appears to be, one thing that definitely should happen is that scumbag Dougie’s future pronouncements be treated as the baseless garbage that they so obviously are.

Once your credibility’s gone, slime bucket, it’s gone forever.

If you would like to lodge a complaint about fraud or wrongdoing involving potential violations of U.S. securities laws, you can do so online with the U.S Securities and Exchange Commission here.

Related articles:
Rotten rumors of impossible Apple stock split helps fund manager Kass clear profits – February 26, 2013
Apple stock split rumor pushes shares higher – February 26, 2013
Doug Kass: Apple to announce stock split on Wednesday – February 26, 2013

37 Comments

    1. Is calling names the best you can do? If someone has a little care for their fellow man and gets the whole town to help someone whose barn burned down, is that a bad ‘communist’ thing? Anytime someone helps someone less fortunate, they must be a ‘dirty communist’ in your books. Can you not imagine a blend between free enterprise and helping your fellow man? History shows examples of how the downtrodden poor rise up and overthrow the greedy.

        1. History is also littered with draconian attempts by tight wing despots to build societies based on their own interpretation of the truth. And, if you think that there has ever been a working communist state, you are sadly lacking in intelligence. For all of their name plates, the Soviets, The Chinese, the North Koreans and the Vietnamese have not practiced communism or socialism. Their economic models are closer to fascism, as the state controls the means of production. So, while you enjoy your little iBauble, remember that it was built by state capitalists who believe in free markets even more than you do; and they’re eating our lunch every day.

          1. This is the crux of the problem in the U.S.A. and many other countries today:

            Misguided Libs/Dems/Progs insist upon legislating against human nature instead of using human nature to achieve the desired results.

            1. Mayhaps, not. The crux of the problem in the USA today is the demagoguery and ideological purity that you seem so fond of. If you would open your mind, you mind find that *everyone* can have something to add to a solution. You need to read some Dickens and Mark Twain…

        2. Ah, yes. Failed socialist states like the Nordics who weathered the recent financial meltdown well, who are leading in education *and* social programs, while their economies are doing quite well. Why, they even have happy citizens, in spite of the price of beer in Stockholm.

          History is also littered with the detritus of failed capitalisme sauvage. Fordism, currently out of vogue with the 1%ers, has been shown to work rather well historically.

          1. Correct me if I’m wrong, but don’t these “Nordic” countries have unlimited geothermic energy supplies? And tiny populations by comparison to the U.S.? And no illegal immigration problems to deal with? How fortuitous. And how easily such things can occlude the failures of a system that takes from the makers by force to give to the takers.

            Sweden’s success, in particular, can be traced to one thing: Deregulation, not robbing the rich in some misguided fantasy of “spreading the wealth” to the poor.

            All communism, socialism, and/or statism does is make everyone poor and dependent or, in Gérard Depardieu’s case, (rather hilariously) Russian.

            1. I think you’re wrong on all counts except smaller populations than the US. They do have a difficult immigration problem (re: look up the Muslim/Arab problem in Sweden). The simplistic view that deregulation fixed Sweden’s problems is quite disingenuous. They did very careful calculations, deregulated where advantageous, and *increased* regulation where needed. Their social safety net remains quite extensive. For example, health care is primarily government funded and supported by taxes, not artificially tied to job status.

              Depardieu is now a caricature. Choosing to live in Putin’s Russia to avoid taxes says it all about him.

            2. Puhlease… Where has democracy and capitalism gotten us … The rich get richer, the poor are poorer, and the middle-class is dwindling.

              No government is perfect when humans let greed take over decision making. Has nothing to do with communism, fascism, democracy, liberalism, conservatism, etc… It’s all about being bought and paid for. The people with money buy and set laws, usually to the detriment of the underprivileged. Even the justice system is money driven… if you have the money to pay your fines, you go home, if you don’t, you go to jail.

        3. If your neighbour is sick and has a state backed insurance for his health benefits, is that the same as many people helping him to get well? Is that not communism in your mind? Many of you refuse to create a universal health care program because you have to label it as communism. Canada is not communist but we do take care of our health with a government backed insurance scheme. We care about each other. How about the US?

            1. Canucks come across the border because they can’t wait forever for medical treatment. And you forgot to mention your incredibly high taxation. What do you think you are, part of Europe? Americans going into Canada for services? Hardly. Although I understand many of us do enjoy dropping in for cheap medicine. Personally I love going to Canada to hunt and fish. And the people are the best. And I’m a good American and I love the good old USA. But it is a pleasure to deal with people in Canada. They’re warm and fuzzy. Or maybe that was a bear?

      1. Yeah, and I think the Cubs even won a World Series once? Although it was over 100 years ago. Hell even Boston finally won a World Series. So sure, anything can happen. Love your fellow man. Personally I’m happier with the Swedish Bikini team but each to his own. Hug your favorite.

          1. Well actually the Swedish Bikini team just loves me so isn’t that what counts? “Sex is not the same as love”? Ok. Catching a 5 pound smallmouth is not the same as love either but they’re all fun.

    2. Guvment mo likely to sue Apple for letting its stock be manipulated. Apple got too large and was thretening thier buddies at Amazon and Google, so take um down. Screw the IP and the indedependent bookseelers says guvment.

  1. Even if they could prosecute him, they won’t. SEC is useless. Of course, CNBC will also keep inviting him on to manipulate the market

    However, the people who blindly bought on a rumor conveyed in a tweet are morons who deserve to get taken

  2. It is crap like this that Apple doesn’t get control of at the time it is happening. Apple knew it was false and that Apple is blocked by a maximum number of shares. SO, LEAK TO SOMEONE THAT IT CAN’T HAPPEN AND HUMILIATE THE IDIOT AND RAISE YOUR FRIENDLY ANALYST STATURE ARMING THEM WITH THE TRUTH!

  3. at minimum the street and cnbc should eliminate him from their respective stables of contributors. no good can come from giving this person any more exposure or credibility.

    from my perusal of his tweets it is evident he knew exactly what he was doing and that he knew he could get away with it.

    douche bag.

          1. oh, it’s nothing more complicated than content taking precedence over form.

            from a content perspective you got the best and most succinct observation i had to offer on this topic…

            sarah palin, on the other hand, is a pretty good example of the other way around …..

            as for my title, it is an honorific one bestowed upon me by my colleagues. as a good friend of mine (a bonafide ph.d) once observed “any fool can get a ph.d, and most fools do.”

            the even better dr.

    1. According to most on this site, they’re not manipulators as the share value skyrockets. They are only manipulators when the rocket comes back to earth. Last summer in August and September I saw many on this site boasting and bragging about how high Apple could go. I saw many agree with the analysts who put $700, $800, $1000 price tags on Apple. Not a critical remark from anyone here back then. Not one. Those who owned the stock watch their net worth jump dramatically. Not a complainer to be found anywhere. Those shareholders and new shareholders bought more and more as Apple went up. “Apple is headed for the moon”! Most of those folks held on as Apple started dropping thinking that it was just temporary. What was temporary was the huge ramp up in AAPL. It didn’t last long. Then it started dropping down towards reality. And that’s when the analysts suddenly became crooked pricks. Funny how that works. Stock goes straight up and the analysts are geniuses. Stock drops like a rock and the analysts are filthy manipulators. Odd.

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