Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Carl Icahn Accused of Illegal Insider Trading

A Blockbuster Inc creditor, Lyme Regis Partners LLC, is suing billionaire investor Carl Icahn over the conversion of his equity stake to debt. The creditor claims Carl Icahn and his investment vehicles used their position of power and inside information to sell their equity interests and essentially convert them into a potentially controlling debt stake.

Hedge Fund Strategies

Insider Monkey isn’t so sure that this will qualify as illegal insider trading. Blockbuster hasn’t been performing well for a while now and nobody was shocked when Blockbuster filed for bankruptcy. If Carl Icahn converted his equity holdings after he learned that Blockbuster’s plan to file for bankruptcy protection was imminent, then the SEC should at least consider investigating the case.

The problem with Carl Icahn’s transactions is that he’s an insider in more than a dozen companies. He’s also an activist investor, going in and out of positions frequently. Some of his decisions may potentially be affected by what he hears inside boardrooms. Prosecutors and regulators usually refrain from pursuing the insider trading cases which may or may not be illegal.

Carl Icahn Previously on Insider Monkey:

Insider Trading in Hain Celestial Group Inc (HAIN)

Insider Trading in Motorola Inc (MOT)