SUM - Summerset Group

[Vaygor1]

Fair enough Roger. It is probably worth a please explain - and good on you for following up. I just don't like seeing NZ business people who are delivering getting nailed to a tree for something which they may have been innocent of.

May have been innocent?

As a director she had all the information and dates well in advance, she knew exactly what she was doing, and she carried it out.

As a director she holds an obligation to arrange her affairs such that she is not forced to sell her lot 2 days before a fixed-schedule price sensitive announcement.

It was deliberate, planned, and her behaviour is reprehensible to say the least.

[Goldstein]

On what basis?

Because Vaygor1 it would likely have meant that she was waiting for the market to be appraised of the 'bad' Q1 figures.

As I've said, I don't believe the two are related. I suspect that Mrs Barlow acted in good faith, trying to sell at the first available opportunity in April.

Now whether SUM has any rules around this I don't know. I've looked, but I think it would have to be a question to Leanne Walker.

Let's see how Roger gets on and see if any NZX rules were broken. My brain really can't make the leap that somebody of Mrs Barlow's calibre would intentionally do something like this.

Disc: Don't currently hold any shares or have any relationship with Norah Barlow.

[Vaygor1]

I suspect the SP would have gone into a real dive if Mrs Barlow sold two days after the Q1 report was released.

On what basis?

Because Vaygor1 it would likely have meant that she was waiting for the market to be appraised of the 'bad' Q1 figures.

And that is exactly what she should have done. Her sell price would then reflect a (more) level playing field, whether she did better or worse out of waiting post-announcement to sell. The end result being no difference to the post-announcement market price, just a potentially big difference in the amount in her bank account at other peoples expense (or benefit). If she had waited 3 days, how would the market have known she was waiting? Answer.. they wouldn't, but the share price would have been fair (up or down) to reflect the Q1 result.

As I've said, I don't believe the two are related. I suspect that Mrs Barlow acted in good faith, trying to sell at the first available opportunity in April.

Acted in good faith? In the words of John McEnroe 'You cannot be serious'. I would bet my left ball that if the Q1 results were great news, Norah would have happily waited 3 days… probably 3 weeks to make sure the market had digested the news.

Now whether SUM has any rules around this I don't know. I've looked, but I think it would have to be a question to Leanne Walker.

Agreed, but more than 1 question required and to more than just Leanne.

Let's see how Roger gets on and see if any NZX rules were broken. My brain really can't make the leap that somebody of Mrs Barlow's calibre would intentionally do something like this.

Make the leap. It's clear. Have you considered SUM's latest figures are possibly a result of her ensuring the 'good news' in SUM became 'fantastic news' in the previous period while she was CEO. It has happened plenty of times before with many companies. The board and auditors can only get into so much detail given cost and time constraints.

Disc: Don't currently hold any shares or have any relationship with Norah Barlow.

Disc: Same as yours. No relationship with Norah. Not a shareholder… but wanting to be.

[Tevita]

Thank you. An informative post for people who don`t rely entirely on the tooth fairy.

[Goldstein]

It is common practice for outgoing CEOs to liquidate their stock. It simply looks to me as if Norah Barlow did this at the first available opportunity.

Looking back at SSH notices, it looks like this is the first time she has sold any of her shares.

Whether she has tripped up here I don't know, but market manipulation?

Anyway, I'll leave it there. I feel the judge and jury have decided.

[Goldstein]

Lets be clear. Nobody is suggesting she manipulated the market.

Vaygor1 has made the assertion: "Have you considered SUM's latest figures are possibly a result of her ensuring the 'good news' in SUM became 'fantastic news' in the previous period while she was CEO. It has happened plenty of times before with many companies."

So we are well and truly down that track Roger.

[winner69]

Roger you seen this

http://www.summerset.co.nz/assets/In...s-LR-2.sml.pdf


Black out periods are only prior to half and full year announcements.

Anyway think she needed to notify a few people as a restricted person

[Goldstein]

Lets be clear then. You agree that she gained a meaningful pecuniary advantage by taking advantage of insider information and selling 2 days before the announcement but then go on to appear to validate this course of action on the basis that she sold ASAP given that some of the stock was subject to a recent release from a long term incentive plan ? I'm sorry I don't follow your logic.
By extension of your logic it would be quite okay for say Julian Cook to be buying millions of dollars of shares immediatly before a really positive future quarterly sales result.
Surely you can see this is illegal insider trading ????? If it weren't so directors of all listed companies would effectively have a free printing press running off $100 notes whenever the occasion presented itself.
Perhaps you are suggesting that because she's done a good job, (in your opinion), and she's retiring she gets a free pass...kind of like if you land on the right square on the monopoly board you get a get out of jail free card ?

No you just don't see my point.

It is my belief that Mrs Barlow was selling her shares irrespective of what the Q1 figures were saying. She had planned to retire and planned to sell down when she did so.

I suggest she would have sold those shares at the same time even if the Q1 results were a lot better.

It is the intent here. They were her shares, and from what Winner has posted she hasn't broken any internal SUM rules.

[winner69]

Thanks for that W69, much appreciated. Interesting that black out period are only restricted to 30 days before the release of half and full year results but that absolutely does not give her a free pass to act in any period outside of the blackout ones where she has material inside information.Also noted therein...if in doubt don't act and other words to that effect.
My opinion remains that she sold immediately before the release of price sensitive information that disappointed many in the market, (how could a flat sales result after a company has been enjoying previous sales growth and EPS profit growth of 46% be considered to be anything other than disappointing). This has insider knowledge and insider trading written all over it in my opinion.

No prob roger

Now promise not to quote nearly the whole doc to build your case

[Vaygor1]

No you just don't see my point.

It is my belief that Mrs Barlow was selling her shares irrespective of what the Q1 figures were saying. She had planned to retire and planned to sell down when she did so.

I suggest she would have sold those shares at the same time even if the Q1 results were a lot better.

It is the intent here. They were her shares, and from what Winner has posted she hasn't broken any internal SUM rules.

Hi Goldstein.

I admire your effort in giving her the benefit of the doubt.

Norah had no obligation to sell her shares when she did any more than to give up her salary when she retired as CEO, but as a Director she sure has obligation to walk the talk when it comes to Policy, Constitution, and Governance.

Given SUM's Securities Trading Policy that Winner produced ( http://www.summerset.co.nz/assets/In...s-LR-2.sml.pdf - thanks Winner), Section 2.2 is clear enough:

2.2 INSIDER TRADING LAWS

2.2.2 If you have any material information, it is illegal for you to:
• trade Summerset’s listed securities;
• advise or encourage another person to trade or hold Summerset’s listed securities;
• advise or encourage a person to advise or encourage another person to trade or
hold Summerset’s listed securities; or
• pass on the material information to anyone else – including colleagues, family or
friends – knowing (or where you ought to have known) that the other person will
use that information to trade, continue to hold, or advise or encourage someone
else to trade, or hold, Summerset’s listed securities.

2.2.3 This offence, called “insider trading”, can subject you to criminal liability including
large fines and/or imprisonment, and civil liability, which may include being sued
by another party or Summerset, for any loss suffered as a result of illegal trading.


In her capacity as a SUM director and as a very recent CEO, Norah undoubtably had material information that the rest of us minions didn't have, and she traded using it at a time she was prohibited from doing so. These are facts. It is not a matter of intent.