Word: foley
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Dates: during 1990-1999
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...Foley claims he did nothing illegal, and he's right. Like many other insiders, he was able to get in on some hot Initial Public Offerings (IPOs), in which privileged players are given the chance to buy shares in emerging companies just before they are offered to the general public. The revelation of Foley's sweet deals by Roll Call, a spry newspaper published twice a week that covers Capitol Hill, shed light on how some IPOs are doled out to a select few while ordinary folks are never given a chance to invest...
...Foley's Wall Street winning streak places him in a charmed circle of investors who are cashing in on today's supercharged IPO market. Buoyed by low interest rates that spur investors to seek higher returns in stocks, American companies are raising record amounts of capital that should make 1993 the biggest year ever for IPOs. So far, more than $20 billion has been raised in IPOs this year...
Brokers usually pass the low-cost shares only to clients who generate the fattest commissions. Foley, a stock-market neophyte with a small account, does not fit that profile. "Foley may just be lucky in the stock market," comments Ellen Miller, executive director of the Center for Responsive Politics, a watchdog group. "But it raises the question, Did he get a special deal, and why do people want to be so especially nice to members of Congress...
...Speaker managed to join the elite ranks of favored IPO buyers through a high school chum who is now his broker, Peter de Roetth of Boston's Account Management Corp. De Roetth defended his sweet offerings by saying, "I would like Tom Foley not to have to think about money." Putting up very little cash, Foley allowed De Roetth to buy and quickly sell shares in companies that rose dramatically in value soon after they were issued. Says Jay Ritter, a professor of finance at the University of Illinois: "Speculators like Foley are just feeding at the trough, throwing sand...
...Foley is a staunch supporter of President Clinton's budget and its support of small business. That plan, as passed by the House, would cut capital gains taxes 50% for investors in IPOs issued by some small companies, provided the shares are held for at least five years. But if the bill passes, Foley won't benefit. His short-term speculative deals will still be taxed at the full rate...