Ring, Ring It's The Margin Man... CEOs Don't Answer

October 15, 2008 5:42 PM EDT

Insiders are getting margin calls at an alarming rate. Many borrowed money on the value of their stocks as they rose, and with the stock market crashing the margin man is collecting and forcing sales.

If company insiders are facing these problems, you have to think that the problem in the hedge fund industry is 10x worse as the leverage used by many hedge funds was significantly higher.

On Friday, Chesapeake Energy (NYSE: CHK), Aubrey K. McClendon, disclosed had to sell nearly all his 33,469,359 shares to meet margin calls. Since then, many others have been disclosed.

Boston Scientific (NYSE: BSX) said approximately 31 million shares in aggregate had been sold last week through involuntary sales related to collateralized loans by Boston Scientific's co-founders Pete Nicholas and John Abele.

Developers Diversified (NYSE: DDR) CEO Scott Wolstein sold 1.2 million shares, or about 45% of his holdings last week to meet a margin call.

Macerich Co. (NYSE: MAC) Chairman and CEO, Arthur Coppola, had 345,173 shares involuntarily sold to satisfy collateral requirements under a line of credit.

XTO (NYSE: XTO) Chairman, Bob R. Simpson, sold 2.8 million shares last week, to satisfied all considerations for debt, personal interests and family liquidity. In addition, Executive Vice President & CFO Louis G. Baldwin sold 535,700 shares of XTO common stock,

General Growth Properties (NYSE: GGP) former CFO, Bernard Freibaum, had to sell 2.95 million shares, to meet margins calls.

XL Capital Ltd (NYSE: XL) Chairman of its Board of Directors, Brian M. O'Hara, involuntarily sold approximately 80% of his XL common shares on October 9th in order to meet a margin loan call

Life Time Fitness, Inc. (NYSE: LTM) CEO, Bahram Akradi, said 582,000 shares were sold to cover loans. Approximately 3,500,000 shares of Mr. Akradi's Life Time Fitness stock continue to be subject to pledges under these loans.

Tesoro Corporation (NYSE: TSO) Chairman/CEO, Bruce A. Smith, sold 251,100 shares to meet margin requirements.

Apartment Investment and Management (NYSE: AIV) said recent substantial reduction in the price of Aimco's Common Stock has caused certain involuntary sales of Common Stock pledged to secure margin debt by two family partnerships in which Terry Considine, Chairman of the Board, Chief Executive Officer and President, holds less than a 0.5% interest overall. The partnerships pledged approximately 2.5 million shares of Common Stock to secure approximately $50 million in borrowings used to buy Common Stock. Approximately 600,000 shares have been involuntarily sold to date. In addition, David Robertson, Executive Vice President and Chief Investment Officer, may be subject to involuntary sales in connection with margin debt secured by 173,000 shares of Common Stock.

Scholastic Corporation (Nasdaq: SCHL) Chairman, Richard Robinson sold 100,000 shares in order to protect the collateral value underlying a personal loan with a bank secured by the shares.

Yesterday, Nabors Industries Ltd. (NYSE: NBR) President and COO, Anthony Petrello, disclosed he sold 1,771,161 shares. It was unclear if the sale was related to margin selling.

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