24/7 Wall St.

Gareth Roberts, CEO of Denbury Resources (NYSE:DNR) was forced to sell 513,000 shares of the company’s stock to meet a margin call "pursuant to a real estate based loan." That was about 15% of his holdings.  This is not at all the first CEO in this boat, and it isn’t just smaller company CEO’s caught up in the margin call mayhem.

• Earlier this month, Boston Scientific’s (NYSE:BSX) co-founders took a similar hit which was re-hit yesterday.
• Aubrey McClendon of Chesapeake Energy (NYSE:CHK) was forced to sell nearly all his Chesapeake stock to meet margin calls on a loan. 
• Even Sumner Redstone has had to sell stakes from his National Amusement entity of stakes in CBS (NYSE: CBS) and Viacom (NYSE: VIA).
• Even Hank Greenberg has not been immune to selling shares in American International Group (NYSE: AIG).

We have said before, and we’ll repeat it now, there will be more of this inthe future.  This doesn’t just happen to leaders of small companies and it doesn’t just happen at troubled companies.  This frequently happens to CEO’s holding stocks that fall in value which might not even be related to their own company.  Now, we are seeing it tied to issues outside of stocks.

Ironically, Denbury is not suffering any hit to its shareprice this morning. The stock is up more than 11% as many investors arestarting to treat news of forced insider selling to meet margin calls as the final pukingphase of a drunk party.

Paul Ausick
October 30, 2008