In light of the AP's new policy on minor crime reporting, I was curious how they would treat this story. Unfortunately, their website has no coverage. However, they did report today on another (alleged) insider trading case, and they use names liberally.
However, I think a journalist is seriously delinquent if they don't acknowledge that insiders normally schedule their stock trades ahead of time to insulate from insider trading accusations. A reader needs to know whether this was the case or not in order to be appropriately outraged.
> In a regulated securities market, this would be considered insider information, and this could lead to jail time
Per the SEC's definition (and thus prevailing law of the land), this is already illegal insider trading. That said, it's a low enforcement priority, largely on account of the victims being unsympathetic.
The journalist has not been charged with anything.
And this actually brings up a fascinating point: is it a crime for a journalist to tell a third party when the journalist will publish a story, if both believe the story will affect the markets?
The journalist isn't telling the third party what the information is -- after all, in this case it seems like it was the third party who supplied it.
And the journalist isn't profiting financially either. They're just getting their story, not a share of profits.
I'm not aware that courts have determined that this is facilitating insider trading. And like I said, the journalist hasn't been charged with anything. But I'm not an expert.
Is this really insider trading, if none of the alleged perpetrators were insiders, nor was there anyone breaching a duty to protect the information. It seems like they'll have a pretty strong defense on this point.
The anonymous sources on Bloomberg M&A scoops all have insider information one way or the other
Yes, but trading on nonpublic information is not illegal unless it was obtained from someone that the trader knew was breaching a duty to the corporation in disclosing it, and some form of compensation is paid to the person that breached it [1].
So it begs the question...how is simply receiving secondhand information from a reporter prosecutable?
You're right, my mistake. Insider trading can be charged criminally. To be precisely correct on this case, we'd need to read the plea filing. The defendant's name is also public record, so while a criminal record search may not ding him, a regular search engine query sure will. :)
It's prosecution for "insider trading" that doesn't rely on anything specific to insider trading. Focus on the insider part, not the trading - it's about embezzlement of confidential information.
> Insider trading is somewhat different becase it's more about being it being unfair than theft or exploitation of another person of company
Unlike wire or mail fraud, there is very little statute to stand on [1]. It's mostly common law, which makes the prosecute-or-not decision more challenging.
[1] https://apnews.com/article/nyc-state-wire-ny-state-wire-new-...
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