Did Cliffs Employees Trade On Privileged Information?
Cliffs Natural Resources Inc. (NYSE:CLF) announced on September 13, 2012, that it would be making executive management appointments as soon as October 1, to which investors responding by buying the stock and sending it up 6.3 percent.
"I believe these changes reposition our senior team toward our most critical current and future business requirements," said Cliffs chairman, president and chief executive officer. "As we transition Cliffs' strategic focus from M&A activities to executing organic growth projects, these executive changes will drive excellence in project execution, ensure operational stability and provide for a more disciplined approach to capital allocation and cost management."
The company named Laurie Brlas the new executive vice president and president of global operations. In a release, Cliffs stated that Brlas would bring to the table great ideas for capital allocation and cost management, providing leadership for safety, capital projects, cost management, continuous improvement and information technology.
The announcement, however, came amid reports of heavy insider trading, which should raise a red flag for investors. This amount of trading suggests these officials may be privy to information not made available to the public.
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