Big Lots' CEO probed for insider trading
Steven Fishman departed from his pre-approved trading schedule to dump $10 million in shares. That was enough to get regulators' attention.
The plot thickens at Big Lots (BIG) as its soon-to-retire chief gets snared in a criminal probe for allegedly dumping stock ahead of some unexpected negative news.
CEO Steven Fishman is under investigation by the Securities and Exchange Commission for his sale of $10 million worth of company stock in March, according to The Wall Street Journal. The U.S. Attorney's office in Manhattan issued a grand-jury subpoena for Fishman's trading records, the Journal reported.
The problem? Big Lots shares lost about a quarter of their value one month after Fishman's trades. Investors fled when the company updated its guidance on retail sales for the first quarter of 2012, saying U.S. store sales were "slightly negative compared to our prior guidance."
Did Fishman sell his shares knowing that the stock would soon tank? Regulators are particularly curious since Fishman's stock sale was outside his scheduled list of stock trades. Company insiders often follow a predetermined trading schedule to avoid any appearance of impropriety. They are allowed to break the schedule, but regulators -- and investors -- sure pay attention when they do.
In July, the Atlanta law firm of Holzer, Holzer & Fistel filed a class action lawsuit against Big Lots, saying the company "knew but failed to adequately disclose that its consumables line was deteriorating." In addition, the lawsuit claims he company didn't adequately inform investors "that its margins and prospects were being adversely impacted by consumers making purchases of big ticket products online."
A day before the Wall Street Journal report, Big Lots announced that the 61-year-old Fishman would soon step down as chairman, CEO and president of the Ohio closeout retailer. A company press release says Fishman will stay in his current role until a successor is appointed.
Big Lots, meanwhile, says there is no relation to Fishman's departure and the SEC investigation. "Unequivocally, Steve’s announcement to retire once a replacement has been found has nothing to do with the (Wall Street Journal) article or the investigation," Charles Haubiel, Big Lots' top lawyer, told The Columbus Dispatch. "It’s a shame that someone who has done so much good for the company and the community has to have this cloud from someone trying to tie him into an SEC investigation."
Big Lots also released its third-quarter earnings report on Wednesday reporting an operational loss of $6 million, or 10 cents a share, compared to the same time period a year earlier. The company acknowledged in the report that it received the subpoena from the U.S. Attorney for documents related to Fishman's stock sale in March.
"We are fully cooperating with the U.S. Attorney in connection with the subpoena," the statement continued. "We also understand that the SEC has initiated an inquiry into this matter, but we have not yet received a document request from the SEC."
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It sound controversial because the media and the politicos have made it that way...The solution should be simple: Establish what the revenue should be.....and spend only what you take in....
Instead, we continue to argue about tax rates, who should pay more and the focus on spending is forgotten.....Balance the GD budget and let's get on with our lives......By the way just to be fair, all government programs should be approved by thye people... and the people should be defined as only those who pay for it i.e those who pay taxes.....
The fiscal cliff is something that is due shortly and it's a matter of a budget plan for the fiscal year, but the bigger cliff, namely the total collapse of the economy and the country, is continuing to build up, no matter what happens with the negotiations to avoid the fiscal cliff.
The spending and the borrowing continue to build up, and eventually, the government will be spending more on paying the debt than on all other programs for which the government is responsible. At that point, there won't be enough funding being collected via taxes and fees to pay for government, which means that, all of the social services will be shut down, and we won't even be able to pay for defense or any of the other national security agencies, where the FBI and CIA and NSA and the whole Homeland Security department wont have any funding.
Our national government might have the power to print money, but there will come a time when the lenders will stop lending, because, whatever money they lent, won't be earning any interest and they'll be lucky to even get back the money the lent.
With fewer and fewer people in the workforce, government will also be collecting less in tax revenues, which will speed up the economic collapse. There are approximately 50% of the people in the country who are dependent upon government services in one form or another, and all of the expense is being paid by about half of the people, aka, the productive side of the population. That's unsustainable and eventually, and soon, we'll have less than half of the people working, while the majority of people will have become dependent upon government for most of their needs.
That economic collapse is unavoidable, and the people who voted to get us there, will deserve every bit of the misery that will come to them.
"I still don't understand why people voted for the incumbent president (can't force myself to say his name) knowing what he and Congress wanted to do to taxes --- and then compalin when their taxes go up!"
Your President dosnt want to raise taxes on the the middle class The republican party is holding the middle class hostage for unpopular spending cuts and increases. Trickel down economics dosnt work it is not 1986 and we now have a world economy. Unpopular things need to happen with our tax code, workers are taxed more then capital. The one percent that live on dividends pay 14% I pay 28% not fair and ballenced IMHO. Since we are now a consumer based economy we need a consumer based tax system that eliminates income and corporate tax system. If we continue with this system the ultra rich and big buisness will continue to shape our tax system for their benafit while the rest of the working middle pay for it. If the tax system stays the same we will all have to pay more taxes no matter who is in office it is our reality and our future. If congress continues to not perform they must go, they are elected to make decisions and compromise doing nothing and recieveing a check and life time benafits is unacceptible.
We need to fight for our FREEDOM. Keep ignoring the obvious, America. We were victimized by GOP Terrorists during the Bush Era. We need to destroy the weeds cropping up from the seeds the sleaze planted.
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