Did Radian Officials Make Insider Buys Before Surge In Share Price?
On September 6, 2012, mortgage insurance company Radian Group Inc. (NYSE:RDN) released its delinquency data for August, sending its stock skyward. Good news for the company, however it seems the firm's insiders may have been trading on insider knowledge.
According to the company's release, the Philadelphia-based company started August with 97,012 primary delinquent loans, and throughout the month whittled this down to 94,823. The stock was also supported by an announcement that the company realized $120 million in after-tax securities gains, and passed off a larger chunk of insurance risk to a third party than an earlier deal had stipulated.
"In August, Radian and the reinsurer mutually agreed to increase the amount of mortgage insurance risk ceded under the agreement from $1.25 billion to approximately $1.6 billion," the company announced.
Radian stock jumped more than 22 percent, but this likely wasn't a surprise for insiders. In the three months leading up to the announcement, company insiders purchased $92,420 in shares, ranging from $2.74 to $3.25 each.
Sanford Ibrahim, the company's CEO, was among the insider buys, purchasing 25,000 shares for a total of 73,660.
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