Texas Gulf Sulphur and Insider Trading
Texas Gulf Sulphur is a company large mining company. In 1957, it was the world’s largest provider of sulphur. In the same year, TGS began an exploration plan to study area named the Canadian Shield. This was a mineral-rich zone. Six years later, TGS began drilling several test sites. TGS was optimistic about the area after the laboratory analysis. As a result, the company created a plan to acquire the land in the Canadian Shield known as Kidd 55. The company desired to control rumors about the acquisition of the land. In November 1963, the president of TGS instructed that the members of the exploration group to must keep the information confidential. Later that year, the company performed a more comprehensive investigation the core from the first tests. The results from this investigation were said to be “remarkable.” In March 1964, TGS successfully acquired the land, and the company chose to continue test drilling to create a more accurate estimation of the size of the discovery. The drilling proved that numerous test points had high quality ore at attractive depths. However, the tests did not give an estimate to the widths of the drill spots. The company continued to test the zone. By April 7th, the test revealed that the area could contain enough ore that commercial drilling could exist. On April 10th, two additional test holes were drilled that revealed a substantial discovery of copper. On April 11th, rumors began to surface that a major ore discovery was in the process. The following day two American paper companies released articles containing unauthorized documents that concluded that the company had a rich discovery. A press release was proposed by the TGS, and they told the public to hold back on the release of the rumors. In the press release, the president of TGS stated the estimations of the volume of ore