Bain Capital has come a long way since the hostile takeovers it was known for when Mitt Romney founded the company in 1984. Today, with a reported 65 billion in assets the company owns industry giants like Toys R Us, Clear Channel Communications (Rush Limbaugh, Sean Hannity, Glenn Beck), Dunkin Brands, Burlington, Warner Music Group, and even the Weather Channel. For a complete list of companies in the Bain Portfolio Click Here
One Company, which is not listed on Bain's Website as a company holding is EDGAR online.
"Bain Capital said Friday that it has invested $12 million in Edgar Online, a publicly traded data services company that helps businesses prepare regulatory filings in a new format that will be mandatory by 2012...Edgar Online’s main offering is helping companies prepare filings for the Securities and Exchange Commission in a computer format known as XBRL, which is used for the S.E.C.’s Edgar tool. It also offers data analysis products for regulatory filings." (Source)
Bain paid $12 million dollars for EDGAR stock and the right to name two Board Members with the company. The question is why.
"EDGAR, the Electronic Data-Gathering, Analysis, and Retrieval system, performs automated collection, validation, indexing, acceptance, and forwarding of submissions by companies and others who are required by law to file forms with the U.S. Securities and Exchange Commission (the "SEC"). The database is freely available to the public via the Internet (Web or FTP)." (Source)
Approximately 3,000 company filings are made with EDGAR each and every day. In fact, if you wish to search for company filings on the Securities and Exchange Commission's website, you will be redirected to the EDGAR database (Source)
So, Mitt Romney's Bain Capital has the ability to monitor every company filing with the SEC before anyone else can see them. Its what is known as a competative advantage. Its also known as Trading on Insider Information if Bain Capital is perusing these financial filings and using them to decide what to buy and sell within its portfolio.
According to SEC Guidelines:
"The SEC adopted new Rules 10b5-1 and 10b5-2 to resolve two insider trading issues where the courts have disagreed. Rule 10b5-1 provides that a person trades on the basis of material nonpublic information if a trader is "aware" of the material nonpublic information when making the purchase or sale. The rule also sets forth several affirmative defenses or exceptions to liability. The rule permits persons to trade in certain specified circumstances where it is clear that the information they are aware of is not a factor in the decision to trade, such as pursuant to a pre-existing plan, contract, or instruction that was made in good faith.
Rule 10b5-2 clarifies how the misappropriation theory applies to certain non-business relationships. This rule provides that a person receiving confidential information under circumstances specified in the rule would owe a duty of trust or confidence and thus could be liable under the misappropriation theory." (SEC.gov)
In what could be viewed as a huge advantage over the average investor, this scandal would make the movie "Wall Street" look like "Sesame Street". An investigation of Bain Capital's internal documents by any enforcement agency, including the SEC or Congress, could make Michael Milkin look like a boy scout activity.
"Milken was indicted on 98 counts of racketeering and securities fraud in 1989 as the result of an insider trading investigation. After a plea bargain, he pled guilty to six securities and reporting violations but was never convicted of racketeering or insider trading. Milken was sentenced to ten years in prison and permanently barred from the securities industry by the Securities and Exchange Commission. After the presiding judge reduced his sentence for cooperating with testimony against his former colleagues and good behavior, he was released after less than two years. (Source)
Milkin could only wish that he had access to every company's financial reports and SEC filings before anyone else knew about them. Mitt Romney's company, Bain Capital, should be investigated at the very least. This article should be front-page news and talked about on every radio show in America.
Don't get your hopes up. With the system so corrupt that the average stock investor doesn't have a chance of making anything on their investments, this is a moral outrage as well. To buy gold or silver email me at firstname.lastname@example.org.