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What was so illegal about the check that Gordon gave Bud?

posted 9 years ago by stevexx28
3 replies | jump to latest

In the restaurant scene that Bud meets Gordon after their first successful trade, when Gordon gives Bud a check for 1,000,000 dollars and says "is that legal?" Bud has this really concerned look on his face, like he just crossed the line and violated some SEC regulation, but I can't figure out what that meant or what it was. Was he giving Bud some money for helping him out? Is that not allowed?

I am confused by that transaction, someone explain this to me.

[–] charli3 9 years ago

It was to cover the 20k shares of Blue Star he had bought. Gekko told him to put the rest in a tax-free mutual fund. It's the most amount of money Bud had ever had possession of...

[–] stevexx28 9 years ago

Yea, I understand that, but if it was so much money, wouldn't he look excited rather than concerned? Is it not legal to pay your broker using checks in restaurants, do you have to do it over the phone or something? And why can't he put the money in a tax-free mutual fund?

He says, "Is that legal?" in a sarcastic kind of tone, which indicates that him giving the check to Bud is illegal. And the expression on Bud's face adds to it and shows that something is wrong. Do any finance/banking people know what law is being broken here?

[–] johndeansmith 9 years ago

1. Nothing illegal with the check. Gekko was just being sarcastic when he handed him the check - kind of almost implying to Bud - "Well, is this real enough for you, pal? Is this good enough for you, pal?" Bud can deposit that check right into Gekko's new account buying a tax free municipal money market or bond fund.
2. Bud Fox was just trying to play it cool but he was shocked when he saw that big check. He tried to hold his excitement in but he fully reacted with the smile and deep breath and staring at the check after Gekko left.
3. Gekko sprung that big check on Bud on purpose. it was the worm on the hook - the bait to get Bud hooked and to do whatever Gekko asked him to do ie get inside information.