John Lester, the Air Force vet who buzzed Hillary Clinton at this week’s candidate forum with a tough question on her mishandling of classified information, is a smart guy. And that’s not the only reason he’s got me jealous. I have been trying since the e-mail scandal broke 18 months ago to think of a good example to convey the fatuousness of Mrs. Clinton’s “I never sent or received anything ‘marked classified’” talking point (which, as I explain here, she has now morphed into “I never sent or received anything with a ‘header’ labeling it ‘classified’”). While I’ve been spinning my wheels, Lieutenant Lester has come up with a great example.
He posited it Thursday in an interview on Fox with Neil Cavuto (aside: How great to have Neil Cavuto back, and looking so fit). Since I have a bit more time and space to develop Lieutenant Lester’s example, I’ll be more expansive.
Let’s say you are the chief executive officer (CEO) of a publicly traded company. You’re sitting at your desk when an e-mail from the chief financial officer (CFO) comes in. It says: “The company had a great quarter! Huge — way, way better than projected! Plan is to announce the results at presser next Tuesday.”
After a fist pump or three, you then e-mail your son, explaining, “Sorry, I need to cancel that lunch we were going to have next Tuesday. It’s quarterly-report time and my company’s got unbelievably great news to break. We’ve got a press conference that day to announce it. Gonna be a bombshell!”
Your son reads the e-mail. He picks up the phone and calls a broker with instructions to buy 20,000 shares of stock in your company. The broker buys the stock. Then, on Tuesday, shortly after your company holds its big press conference announcing far-better-than-expected quarterly earnings, the stock price zooms through the roof. Your son promptly sells the stock at a mega profit. He’s so thrilled, he even buys you that BMW you’ve been eyeing.
On these facts, which are hardly unheard of, is there any chance that the FBI, the SEC, and the Justice Department would not come a-hounding? Any chance you and your son would not be hit with a felony-laden indictment for trading stock based on confidential insider information?
Well, let’s think about this.
What if the FBI asks to interview you before deciding whether to recommend felony charges. You tell the Feebs, “Gee, I had no idea the information in the CFO’s e-mail was confidential. Have a look at the e-mail: it isn’t marked ‘confidential’ anyplace. In fact, there isn’t even a ‘(C)’ in the margin, and there certainly isn’t a big, bold ‘confidential’ header on top. How could I possibly have known it was confidential information that I wasn’t allowed to transmit in casual e-mail exchanges with my son? And how could I have known he’d use the information to make a killing in the stock market?”