On December 9th of last year the U.S. Treasury sold its final 31.1 million shares of General Motors (GM) stock, coming just a year after Treasury announced plans to exit its 500 million share position in the once bankrupt car company. According to a timeline created by NPR, the Treasury department sold out less than one month before GM executives linked a faulty ignition switch to 31 crashes and at least 13 fatalities.

Treasury’s decision to dump its entire stake in GM allowed it to avoid $262 million in potential losses.

Nine days later in New York former SAC trader Michael Steinberg was convicted on multiple counts of insider trading shares of Dell. Steinberg will be sentenced later this month and is facing up to 85 years in prison. Steinberg’s crime was trading based on a chain of evidence including ex-employees and an analyst with a different firm who reportedly had close ties to the company.

Steinberg’s information led to, in the Government’s words, “profit or avoid losses of at least $1.7 million.” That’s not a typo. Steinberg was arrested in front of his children, professionally ruined and could go to prison for 85 years because of second and third-hand information that convinced a jury Steinberg had helped SAC avoid $1.7 million in losses.

Yahoo Finance’s Rick Newman has written about GM’s “shrewd timing” in the past, correctly observing that the Treasury Department had no official operational authority at GM. That said, as Newman points out in the attached video that hands-off approach isn’t the end of the story.

“By definition the government had inside information (when it sold its stake in GM),” says Newman. “The Transportation Department knew there was a problem with these vehicles as early as 2007. That doesn’t mean somebody connected all the dots and passed the information from the Transportation Department to Treasury but it’s the government, so the government did have inside information.”

Was what the government did when it came to dumping GM shares a violation of insider trading laws? Based on the way the law is written and the earnestness with which U.S. Attorney Preet Bharara has been prosecuting Wall Streeters the answer is almost certainly yes.

Here’s the law: “Illegal insider trading refers generally to buying or selling a security, in breach of a fiduciary duty or other relationship of trust and confidence, while in possession of material, nonpublic information about the security. Insider trading violations may also include "tipping" such information, securities trading by the person "tipped," and securities trading by those who misappropriate such information.”

Bharara has gone 80-0 against accused violators of a law that doesn’t require hard evidence to prosecute yet its highly unlikely there will be any substantial investigation of the government’s suspiciously brilliant GM trade. Whatever your take on white collar crime the people buying GM from Treasury were the same widows, orphans and pension funds victimized by SAC.

No one needs to cry for hedgies but a nation of laws can do better than the ongoing Spanish Inquisition-style prosecution of a law that still doesn’t have a clear definition.

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