[GRADE A1 — EFTA01267639 (brokerage records, SDNY production)]
EFTA01267639 shows Epstein's brokerage account held both KORS stock AND put options in June 2014. Put options are bearish bets that profit when a stock declines. Holding stock and puts simultaneously is a hedged position — it profits from downside while maintaining upside exposure.
The timeline raises a specific question:
| Date | KORS Event | Price |
|---|---|---|
| Feb 25, 2014 | KORS all-time high | $101.04 |
| June 2014 | Epstein brokerage holds KORS stock + put options | ~$82-85 (declining) |
| Sep 4, 2014 | Sportswear Holdings (Stroll/Chou) announces final exit — all 11.6M remaining shares | $79.97 close |
| Sep 5, 2014 | Offering priced at discount; Stroll + Chou resign from board | $76.75 |
If Epstein had advance knowledge that Stroll and Chou were planning to dump their entire remaining position and resign from the board, purchasing put options in advance would be a textbook insider trading strategy. Board members planning a secondary offering of this size would have been working with underwriters for weeks or months before the September announcement.
WHAT THIS DOES NOT SHOW: No communication between Stroll and Epstein about KORS is documented in the corpus. Epstein's KORS position may reflect his own market analysis of a stock that had been declining since February — public analyst reports in the period were already bearish (Citigroup cut its price target; William Blair downgraded). A hedged KORS position in June 2014 could be explained without inside information. This thread would require SEC Form 4 filings (CIK 1530721) to determine exact insider sale timing and compare to Epstein's trade dates — this analysis has not been performed. [GRADE D — insider trading hypothesis is inference]