Editing Harken Energy scandal (section)

===SEC investigation===
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The SEC's exhaustive investigation examined thousands of pages of documents. Additionally, and in an unusual move, Bush waived client-attorney privileges so the attorneys could be questioned, in order to leave no remaining doubts on the subject. Regarding whether Bush knew in advance about the losses, the SEC investigators found: "The evidence establishes that George W. Bush was not aware of the majority of the items that comprised the loss Harken announced on August 20." The SEC investigators concluded that the loss resulted from write-downs and expenses that occurred after he sold his stock. Basically an outsider, Bush did not usually receive the Executive Committee's Weekly Flash Reports on the company's financial condition. In short, concluded an SEC investigative memo, George W. Bush was not particularly informed about the company's finances.

Regarding whether the stock was sold deliberately in time to avoid losing money before bad news was made public, the SEC found that Bush did not initiate the sale, but was contacted by a stockbroker who offered to buy a large block of Harken stock. There was evidence that before selling the stock, company board member Bush checked with inside and outside company executives, fellow directors and legal experts concerning the sale of his stock. The SEC report read, "In light of the facts uncovered, it would be difficult to establish that, even assuming Bush possessed material nonpublic information, he acted with sentience or intent to defraud."

Whether the news of Harken's unexpectedly large loss hurt the company's investors unfairly was quickly discarded after the SEC examined Harken Energy's share price just before and just after news of the loss was made public. Though the price dropped about 20% that day, the move downward was not immediate, and the price rebounded to $3 the following day. If indeed the announcement had caused a loss of confidence in the company, SEC investigators reasoned, the stock would most likely have fallen immediately and stayed down. "The conclusion of the Office of Economic Analysis is that, because the price of Harken did not immediately react to the earnings announcement and there is no news that explains Harken's return to its pre-announcement price of $3 on August 21, 1990, the earnings announcement did not provide investors with new material information," the SEC wrote. Moreover, the stock rebounded the next year and hit $8 a share.